Biden administration official hints at stablecoin legislation that could come into force this year

Coin desk report US federal officials have hinted that the government is working with Congress on a Stablecoin bill that could become a law by the end of the year.

The president’s working group on financial markets met on June 30 to discuss activities within the stablecoin space and future legislation, according to people familiar with the matter.

In particular, the conference included discussions from regulators and other participants on the nature of stablecoin, especially algorithmic stablecoin, and how they are provided.

The focus of the debate was how efforts could be put together to ensure that the Stablecoin Act would come into force by the end of the year. The legislative package is expected to provide the statutory definition of Stablecoin and their use during implementation.

Officials said the House Financial Services Commission would introduce the law.

Stablecoin regulatory framework

Discussions on the Stablecoin regulatory package began in November 2021. report According to the President’s Working Group on Financial Markets.

In a report by Biden administration officials, the group called on Congress to introduce regulatory oversight and a formal market structure to protect investors, issuers and exchanges. This also included a law limiting the institutions that could issue stablecoins.

Gary Gensler, chairman of the US Securities and Exchange Commission and a member of the Working Group, added that Stablecoin should comply with AML / CFT standards. He said the law should ensure that Stablecoin is placed under the framework of federal regulation to achieve this.

Therefore, the proposed stablecoin law may be characterized by a law that seeks to fulfill these demands, especially in the light of the recent downturn in the crypto market.

The collapse of TerraUST has drawn particular attention to Stablecoin and has urged regulators to accelerate the introduction of regulatory frameworks. The algorithm Stablecoin, which crashed in May, created a spillover effect that affected cryptocurrency institutions such as Celsius and Three Arrows Capital.

Similarly, after the crash, Do Kwon, CEO of Terraforms Labs, the company behind TerraUST, was the subject of several investigations and allegations. These claims further increase the need for measures to increase transparency and accountability regarding Stablecoin’s integrity.