Hill Delivers Remarks at Hearing on Stablecoins’ Role in Payments and the Need for Legislation
Washington,
April 19, 2023 -
Today, the House Financial Services Subcommittee on Digital Assets, Financial Technology and Inclusion, led by Chairman French Hill (AR-02), is holding a hearing entitled "Understanding Stablecoins’ Role in Payments and the Need for Legislation."
Watch Chairman Hill’s opening remarks here.
Read Chairman Hill’s opening remarks as prepared for delivery:
“Good morning and thank you for joining us at our first hearing on payment stablecoins of the 118th Congress.
“Today’s hearing marks the official resumption of the House Financial Services Committee’s efforts to enact payment stablecoin legislation.
“Last Congress, Democrats and Republicans worked together on a proposal to bring payment stablecoin issuers under a regulatory framework in the U.S. and allow stablecoins to unlock their potential as a contributor to a modern payments system.
“That proposal from September was noticed to today’s hearing. And like Chair McHenry has repeatedly called it—it’s an ugly baby, make no mistake. But it’s our ugly baby.
“Last year, members from both sides of the aisle reviewed the proposal, provided feedback, and worked to reach an imperfect compromise that nobody really liked. But the clock ran out due to the elections. No one walked away from bipartisan negotiations, and nobody is saying the bill noticed to the hearing is perfect.
“That’s why we’re here today to discuss this proposal and hear from our witnesses about how this bill, with revisions, can address the potential benefits and risks described in the Administration’s 2021 report on stablecoins.
“The Financial Stability Oversight Council recommended that Congress pass a legal framework, and Chairman McHenry and I are committed to working across the aisle to pass payment stablecoin legislation, and we are hopeful that the members in this room will build the foundation of that work.
“Luckily, we have already made significant headway with the proposal noticed today.
“By requiring payment stablecoins to be backed one-for-one by high quality liquid assets held in reserve, the proposal mitigates run risk.
“The legislation also requires stablecoin issuers to comply with redemption requirements, monthly attestation and disclosures, and risk management standards.
“These are just a few ways that this legislation establishes strong and much-needed consumer protections in this area.
“However, there is more work to be done.
“It is my goal that our payment stablecoin legislation will provide different ways for issuers to come into compliance.
“I believe innovation is fostered through choice and competition, and one way to do that is through multiple pathways to become a stablecoin issuer, though with appropriate protections so that we prevent regulatory arbitrage and a race to the bottom.
“I’m glad to have Superintendent Adrienne Harris from the New York Department of Financial Services to explain the framework that is currently in place in New York and discuss the requirements that payment stablecoins issuers must comply with.
“Finally, I want to reiterate the urgency for those of us in this room to work together to pass payment stablecoin legislation.
“Recent reports indicate that digital asset developers are leaving America to go to countries that have a more established regulatory framework for digital assets.
“This is not good for innovation, jobs, or consumer and investor protection.
“The ongoing turf war between the SEC and the CFTC over digital assets is also not just unhelpful, but unsustainable.
“When you have two agencies contradicting each other in court about whether one of the most utilized stablecoins in the market is a security or a commodity, what you end up with is uncertainty.
“Federal regulators have made it abundantly clear that without an act of Congress, they will continue to interpret their authorities broadly, even when in direct contradiction with one another.
“That’s why it’s time for Congress to act now to pass legislation to establish a regulatory framework for payment stablecoins.
“We look forward to hearing from our witnesses on the essential considerations that we must factor into our discussions as we seek to pick up where we left off on these legislative efforts.”
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