The stablecoin regulation bill has come under fire from Democratic lawmakers in the United States, who are concerned that the lack of a clear regulatory framework may lead to stablecoin issuers seeking out other jurisdictions.
The bill, which was created in 2022 by Republican Patrick McHenry of North Carolina and California’s Representative Maxine Waters, initially received praise from members of the Republican Party but faced criticism from Democrats, who felt that it was outdated.
During recent hearings, Waters expressed that the bill has changed significantly due to amendments by the Republicans, and it may have to be rewritten from scratch.
Democrat Stephen Lynch of Massachusetts also voiced his concerns, stating that stablecoins should not be used for payments as they are mostly utilized for speculative trading in cryptocurrencies.
McHenry and Waters acknowledged that a lot has changed in the crypto industry since the bill was last debated, including the collapse of major exchange FTX.
Therefore, lawmakers need to make amendments to the document as soon as possible to avoid falling behind other countries, such as Singapore, the UAE, and the UK, which are already creating regulatory frameworks for stablecoins.
Stellar Development Foundation CEO Denelle Dixon recently suggested that the introduction of specific rules to oversee stablecoins by US lawmakers would strengthen the value of the US dollar.