Senator Bill Hagerty has introduced a discussion draft of legislation aimed at creating a regulatory framework for stablecoins, closely resembling the work already underway in the House of Representatives.
Hagerty, a Republican from Tennessee, announced that his proposal "provides much-needed clarity" for the regulation of stablecoins. The draft aligns with the Clarity for Payment Stablecoins Act, which has been developed in the House by Rep. Patrick McHenry, R-N.C., and Rep. Maxine Waters, D-Calif.
Hagerty’s office described the draft as a Senate version of the McHenry-Waters bill. As a member of the Senate Banking Committee, Hagerty holds influence over key agencies like the U.S. Securities and Exchange Commission, which could play a role in stablecoin oversight.
Framework for Federal and State Oversight
The draft bill mirrors the House proposal, dividing federal oversight between the Federal Reserve, which would supervise banks, and the Office of the Comptroller of the Currency, responsible for non-bank institutions.
A key provision would allow issuers surpassing $10 billion in stablecoin issuance to remain under state regulation if granted a waiver by federal authorities. Another crucial element of the draft is the requirement for issuers to maintain one-to-one reserves in U.S. currency.
“Stablecoins have the potential not only to enhance transactions and payment systems, but also to help create new demand for U.S. Treasuries,” Hagerty stated, highlighting the wider economic benefits. He added that the lack of clear regulations has hindered these advantages for too long.
Ongoing Bipartisan Efforts
The push for a stablecoin regulatory framework has been a point of contention in Washington. Since 2022, Rep. McHenry and Rep. Waters have worked on a bill that passed the Republican-led House Financial Services Committee but stalled due to disagreements.
Waters had previously criticised the House bill for allowing state regulators to approve stablecoin issuances without involving the Federal Reserve. However, her recent statements indicate a shift, with Waters signalling a willingness to negotiate and strike a "grand bargain" before the year ends.
Waters has now emphasised that the Federal Reserve must play a dominant role in stablecoin regulation, particularly to ensure stablecoins are backed by safe reserves like short-term Treasury bills.
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Industry Reactions and Future Prospects
The introduction of Senator Hagerty’s draft has sparked renewed optimism within the crypto industry. Cody Carbone, president of The Digital Chamber, expressed encouragement at the release of the draft legislation, though he acknowledged the limited timeframe for passing the bill within the current Congress. Carbone added that bipartisan support for stablecoin regulation makes this a priority for lawmakers.
Ron Hammond, director of government relations at the Blockchain Association, called the draft "an important development," particularly in light of recent comments by McHenry and Waters. He suggested that if stablecoin legislation is not finalised before the year’s end, Hagerty’s bill could become the foundation for a Republican-led Senate Banking Committee in 2025.
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Challenges Remain Despite Momentum
While Senator Hagerty’s draft signals progress, the legislative path remains complicated. A lack of consensus on key provisions, such as the role of state versus federal regulators, continues to pose challenges.
Despite bipartisan support, it is unclear whether this draft will gain traction before Congress adjourns for the year.
Anais
链向资讯
Cointelegraph