Republican congressmen recently introduced a bill regarding stablecoins that aims to eliminate the Securities and Exchange Commission’s (SEC) oversight of digital stablecoins.
The revised version of the bill would strip the SEC of its authority over stablecoins, except for algorithmic stablecoins and central bank digital currency (CBDC).
The bill primarily focuses on stablecoins that are utilized for payments, proposing that regulatory power be transferred to federal and local banking regulators, as well as credit unions.
These entities will be responsible for inspecting non-bank issuers and ensuring that they comply with anti-corruption and anti-money laundering laws.
Furthermore, stablecoin issuers will be required to back each issuance with legal tender or short-term treasury bonds, and they will be obligated to provide monthly audited reports by certified accounting firms.
The congressmen who presented the bill expressed their dissatisfaction with the SEC’s approach to regulating the cryptocurrency industry, specifically stablecoins.
Congressman French Hill commented on his disappointment with the SEC’s oversight of digital assets, while Financial Services Committee Chairman Patrick McHenry expressed frustration with the lack of clarity regarding whether Ether is a security.
The congressmen were also frustrated with SEC Chairman Gary Gensler’s opinion that most cryptocurrencies have characteristics of securities and should fall under the SEC’s jurisdiction.
In a CNBC interview, former SEC Chairman Jay Clayton suggested that courts were not the appropriate venue to recognize or deny crypto assets as securities.