Senator Kirsten Gillibrand (D-N.Y.) unveiled plans to introduce new stablecoin legislation in collaboration with Senator Cynthia Lummis (R-Wyo.) during the Bitcoin Policy Summit at the National Press Club in Washington on April 9. The legislation aims to establish a regulatory framework that fosters innovation while ensuring safety and soundness within the stablecoin industry.
Gillibrand emphasized the importance of unlocking the potential of cryptocurrencies, particularly emphasizing Bitcoin’s original purpose as a means of payment. Through consultations with key stakeholders such as the Federal Reserve, Treasury, and the New York State Department of Financial Services, the legislation seeks to enable nondepository institutions to issue stablecoins while maintaining regulatory oversight.
Gillibrand on Stablecoin Integrity
The proposed legislation builds upon the Lummis-Gillibrand Responsible Financial Innovation Act, introduced last year, which aimed to create a comprehensive regulatory framework for all crypto assets. Gillibrand highlighted the necessity of granting regulatory authority to both federal and state regulators to ensure the integrity of stablecoin issuers and their reserves.
Crucially, the legislation outlines two paths for stablecoin issuers: one for depository institutions, allowing federal and state-chartered banks to become issuers, and another for non-depository institutions, subject to federal supervision while preserving state regulatory authority.
Gillibrand emphasized the bipartisan nature of the bill, stating that it balances the interests of federal, state, and industry stakeholders. She stressed the need for continued collaboration to advance the legislation and unlock the full potential of crypto assets.
The negotiations surrounding the legislation have garnered bipartisan and bicameral support, with chairman Patrick McHenry (R-N.C.) and ranking member Maxine Waters (D-Calif.) of the House Financial Services Committee being involved. McHenry echoed Gillibrand’s sentiments, highlighting the significance of stablecoins as a crucial step towards broader cryptocurrency regulation in the United States.
Gillibrand and Lummis’s proposed stablecoin legislation represents a significant step towards regulating the rapidly evolving crypto landscape. By fostering innovation while prioritizing safety and soundness, the legislation aims to unlock the full potential of cryptocurrencies like bitcoin, paving the way for their broader adoption and integration into the financial system.