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On May 19, the Congressional Committee on Digital Assets, Financial Technology, and Inclusion is gearing up for yet another examination of stablecoins. This marks the third instance of such an investigation within the past month. Two more potential legislative drafts, presented by Committee Chair Rep. Patrick McHenry and Ranking Member Rep. Maxine Waters, now grace the Committee's website. These drafts echo similar themes from their shared proposal presented last year. The regularity of these hearings and the persistent introduction of new drafts affirms the House's determination to bring a bill to fruition in this domain.
While perspectives regarding crypto regulation differ among Subcommittee members, a consensus on several core aspects of payment stablecoins seems to emerge. What hasn't been observed so far is Congress suggesting the regulation of payment stablecoins via a securities framework. Yet, the SEC, a notable financial regulator, seems ready to embrace this approach. Given the preceding legislative activities centered around stablecoins, it would be ill-advised for financial regulators to usurp Congress's role with premature regulatory actions.
Though the SEC hasn't formally proposed a rule, released any guidance, or initiated an enforcement action concerning the use of stablecoins, SEC Chair Gary Gensler has voiced his belief on several occasions that these "so-called stablecoins" might qualify as securities. He has likened them to "casino poker chips" or potential security-based swaps when employed within crypto trading platforms. The SEC perceives certain payment stablecoins as securities and might be on the verge of launching enforcement actions against them.
Finding common ground between crypto proponents and U.S. regulators has become increasingly complex, especially given recent developments. Nevertheless, the budding agreement on the need for comprehensive legislation pertaining to payment stablecoins presents Congress with a chance to implement prudent regulation over a critical slice of the crypto market.
