WASHINGTON, D.C. - Today, Congresswoman Maxine Waters (D-CA), the top Democrat on the House Financial Services Committee, unveiled payment stablecoin legislation agreed to by then Chair McHenry’s and Ranking Member Waters’ staffs. This bill represents the culmination of three years’ worth of work to craft bipartisan stablecoins legislation, dating back to when Waters was Chair, and reflects extensive collaboration and technical assistance from the Treasury Department and the Federal Reserve.
“After years of good-faith, bipartisan negotiation and collaboration with regulators and stakeholders, last Congress, the Republican and Democratic Committee staff jointly drafted payment stablecoins legislation that would create a strong federal framework and put consumer protection front and center,” said Congresswoman Waters. “This draft bill fosters innovation, while properly addressing and prioritizing concerns I have long held about safeguarding our nation’s consumers from scams that have plagued the crypto industry. At the start of this Congress, Chair Hill extended a hand of bipartisanship to work on stablecoins legislation. I firmly believe that the legislation that I’ve unveiled today provides the best foundation for moving forward and getting urgently needed stablecoins legislation signed into law.”
The release of this legislation comes just ahead of Tuesday’s subcommittee hearing to explore the future of crypto.
Specifically, this piece of legislation:
- Creates a regulatory framework for both depository institution stablecoin issuers as well as nonbank stablecoin issuers with a central role for the Federal Reserve throughout, that includes strong reserve requirements;
- Protects the separation of banking and commerce by prohibiting non-financial commercial companies (e.g. Big Tech firms like Facebook, Google, X, etc.) from owning a stablecoin issuer;
- Explicitly subjects issuers to sanctions laws and requires compliance with anti-money laundering and counter terrorist financing laws;
- Closes loopholes that would allow stablecoin issuers like Tether to circumvent US law overseas;
- Bans certain convicted individuals, like FTX’s Sam Bankman-Fried, from serving as an executive officer or controlling more than 5% of the shares of an issuer;
- Includes robust protections for consumer wallets, including risk management and financial resource requirements, as well as back-up examination and enforcement authority for the Fed;
- Protects the existing authorities of the Treasury, CFPB, SEC, and CFTC with respect to any entity covered by the Act (e.g. stablecoin issuers, wallet providers, broker-dealers, venues or exchanges that facilitate the trading or swapping of payment stablecoins, and market-makers or other intermediaries that maintain liquidity for payment stablecoins, etc.) to the extent they engage in activities subject to their oversight and jurisdiction;
- And more.
See the full text of the bill here and the section-by-section.
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