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Two stablecoin bills considered by the House Financial Services Subcommittee on Digital Assets, Financial Technology, and Inclusion are solid starts, but CUNA suggested several revisions in a letter sent Thursday. A stablecoin is a cryptocurrency that has reserves underpinning its value.
“The market for stablecoins has grown exponentially over the years with no signs of abating. But in the explosive growth and development of stablecoins, there remains an insufficient federal framework to protect consumers, support the financial institutions which serve them, and create safe access to stablecoins,” CUNA’s letter reads. “We thank you for holding this hearing today to continue your development of legislation on stablecoin products to develop a clear and comprehensive federal framework.”
CUNA offered suggestions for the bill offered by the subcommittee majority, which would essentially create three tiers of stablecoin regulation and supervision.
“This bill creates a three-tiered system where large merchants, such as Amazon, can begin issuing stablecoins without clear and consistent oversight and examinations while the subsidiary of the highly regulated and supervised credit union, that is perfectly poised to help consumers safely engage with this nascent financial product, must jump through many more hoops to do the exact same thing,” the letter reads.
CUNA also offered changes to the bill offered by the subcommittee minority, including ensuring it includes privately insured credit unions and that nonbank entities have mandatory examinations.
“A single regulatory framework should be established for the approval, operation, and ongoing examination of payment stablecoin issuers. This must include state qualified issuers,” the letter reads “Without a single framework, the only incentive will be to become licensed under the least restrictive state framework putting highly regulated financial institutions and consumers at a disadvantage.”