Lawrence Damilola
Crypto-friendly Senator Bill Hagerty has introduced a discussion draft for legislation to create a regulatory framework for stablecoins— a move that could reshape the entire crypto industry.
The Tennessee Republican’s proposal resembles the Clarity for Payment Stablecoins Act, which is currently being worked on in the House of Representatives by Rep. Patrick McHenry, R-N.C., and Rep. Maxine Waters, D-Calif. In a statement on Thursday, Hagerty revealed that his draft seeks to provide much-needed clarity to stablecoin regulations.
Hagerty, who is a member of the Senate Banking Committee, structured his draft to split federal supervision of stablecoins. Under the proposal, the Federal Reserve would oversee banks, while the Office of the Comptroller of the Currency (OCC) would regulate non-bank issuers. Additionally, the draft includes a provision that allows stablecoin issuers exceeding $10 billion in assets to receive a waiver from federal oversight, enabling them to remain under state regulation. The legislation also requires stablecoins to be backed one-to-one with reserves held in U.S. currency.
In his statement, Senator Hagerty emphasized the potential benefits of stablecoins, noting that they could enhance payment systems and create new demand for U.S. Treasuries. He expressed concerns that the absence of clear regulatory guidelines has hindered the growth and adoption of stablecoins.
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Negotiations surrounding the passage of stablecoin legislation have been ongoing in both the House and the Senate. In the House, McHenry and Waters have worked on the Clarity for Payment Stablecoins Act since 2022. The bill advanced out of the Republican-led committee but has faced hurdles in gaining broader support. One of the main points of contention was a provision allowing state regulators to approve stablecoin issuances without the involvement of the Federal Reserve.
Industry Reactions Towards The Bill
Cody Carbone, president of The Digital Chamber, responded to the release of Hagerty’s draft, saying that the draft has revitalized discussions around stablecoin regulation. Carbone noted that pushing for a stablecoin regulatory framework is bipartisan.
Ron Hammond, director of government relations at the Blockchain Association, described Hagerty’s draft as an “important development”. He referenced comments made by Rep. McHenry and Rep. Waters, who have both indicated a desire to move forward with stablecoin legislation. Hammond also stated that Senator Hagerty’s efforts could serve as a starting point for discussions in the Senate Banking Committee.
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LAWRENCE
Lawrence is a cryptocurrency journalist covering blockchain developments and digital assets.
