US Legislation on stablecoins might pass in 2022
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One of the key focus areas of the annual Fintech Policy Forum hosted by the ETA (Electronic Transaction Associations) on September 22 was discussing stablecoins and a potential regulatory framework.
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What was needed was an opportunity for leaders and decision-makers to discuss how technological innovation and public policy could be used together to benefit consumers, businesses and the economy.
It is possible that they will find a way to agree on a stablecoin note by the end of the year. U.S. Representative Warren Davidson (R-Ohio)speaker at the forum.
Due to the mid-term elections in November, Parliament may not be able to achieve this goal this year. Davidson said the Republican-controlled House of Representatives could take up the issue in 2023 if the House cannot reach a deal in this year’s election session.
As a member of the House Financial Services Committee, Davidson is one of crypto’s most established advocates in Congress. he is considered one of its most vocal supporters. There has been some debate among committee members about stablecoins as draft legislation has circulated from time to time, but Davidson is concerned that it gives the Federal Reserve too much discretion and applies too broad a definition to stablecoins as a whole.
Apart from Rohit Chopra Director of the Consumer Financial Protection Bureau (CFPB).Rohit Chopra, director of the Consumer Financial Protection Commission (CFPC), also gave a speech explaining the potential of adopting stablecoins and how many institutions are paying attention to them.
“A stablecoin that runs on the rails of a dominant payment system or a mobile operating system, I think could be created everywhere very quickly. Stablecoins are being considered a lot, but certainly not just at the CFPB.
There is no doubt about it stablecoins represent an exciting opportunity for user adoption. However, the CFPB director must acknowledge that they also pose significant risks to the financial system, requiring regulatory oversight. Among the risks associated with these systems are the fact that they resemble money market funds and their impact on global financial stability, should they be widely and quickly adopted into the payment process.
According to Chopra, the original reason regulators took notice of payment coins was Facebook’s attempt to launch its Libra stablecoin.
While stablecoins and cryptocurrencies in general are a clear threat to the existing financial system, CFPB chief believes Washington is neglecting other areas of fintech development that deserve equal attention from policymakers as a digital asset, as Washington’s current focus on crypto may be neglecting these other areas.