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Senator Cynthia Lummis disclosed on CoinDesk TV Thursday that the much-anticipated legislation to establish regulations for U.S. stablecoin issuers is undergoing "quite delicate" negotiations.
She emphasized ongoing discussions between Democrats and Republicans and between the U.S. Senate and the House of Representatives.
Optimism Amid Negotiations
As the Senate's leading advocate for crypto policy and the co-author of significant legislative efforts aimed at regulating digital assets, Lummis expressed optimism regarding the potential success of stablecoin legislation this year. She indicated that discussions on the stablecoin component have received positive feedback from the Federal Reserve, increasing the likelihood of legislative progress.
Lummis voiced confidence, stating, "I'm optimistic that we will see stablecoin legislation this year and possibly even in the first half of this calendar year." She highlighted the challenges associated with legislative efforts later in the calendar year as the focus shifts towards re-election campaigns and maintaining party majorities.
Progress and Bottlenecks in Congress
The current Congress has made notable advancements in crypto legislation, with Republican-led House committees advancing bills related to market structure and stablecoins to the House floor. However, the Senate Banking Committee, led by Democratic leadership, has faced challenges in demonstrating significant interest in passing crypto-related legislation.
Stablecoins such as Tether's USDT and Circle Internet Financial's USDC play a critical role in crypto markets. Despite stablecoins' importance, legislative efforts have faced obstacles, particularly concerning the oversight role of federal agencies or state authorities in regulating stablecoin issuers.
According to Coin Desk, Lummis acknowledged the ongoing dynamic discussions surrounding stablecoin regulation, emphasizing that progress is still being made. However, she expressed optimism, noting that "there really is light at the end of the tunnel."
Legislative Priority and Industry Developments
House Republicans have prioritized advancing multiple crypto bills to floor votes, with recent developments indicating a continued focus on legislative efforts. Representative Patrick McHenry (R-N.C.), chair of the House Financial Services Committee, has emphasized the importance of addressing crypto-related issues before the end of his term in Congress.
According to Daily Hodl, Lummis highlighted recent industry developments, including the SEC's approval of spot bitcoin exchange-traded funds (ETFs), as significant milestones contributing to the case for legislation. These developments, coupled with increasing institutional involvement from firms in the bitcoin ETF space, reflect growing confidence in the maturity and adoption of crypto assets.
Photo: Joshua Hoehne/Unsplash
