A new bipartisan legislation to establish a regulatory regime for stablecoins in the United States (US) has been delayed until after the August recess.
Progress has been made
In a statement has been informed that significant progress has been made in terms of an agreement on the new legislation. However, new negotiations will now have to wait until after the August recess. The following was added to this:
“It is critical that we continue to push the ball on this so that we can have a regulatory framework that protects consumers while enabling responsible innovation.”
Initially, the new law was expected to be implemented yesterday. This hasn’t happened yet. The piece of legislation reportedly targets stablecoin issuers such as Tether and Circle to keep 1:1 reserves of their stablecoins in circulation and would also limit the types of assets these stablecoins could support.
Stablecoin Risks
Concerns were previously raised about how the proposed law would answer questions about the storage of digital assets. This is a big reason for the postponement of the new law.
The risks of stablecoins were noted in a hearing last February. Here some studies would have shown that many of the stablecoins are in fact not fully backed by a reserve asset. Finally, this would entail unnecessary risks for consumers. This should therefore be looked into.
