The House Committee on Financial Services has scheduled a markup session for the STABLE Act on April 2. This bill, led by Representatives Bryan Steil and French Hill, aims to regulate payment stablecoins through a comprehensive federal framework. The updated version of the bill includes refined definitions, strengthened compliance mechanisms, and criteria for issuer qualification. However, it still prohibits the issuance of yield-bearing stablecoins, a feature that some argue is essential for user adoption and economic utility.
The STABLE Act categorizes qualified issuers into federally regulated institutions, nonbank entities approved by the Comptroller of the Currency, and state-supervised entities operating under certified regimes. Despite concerns around investor protection and regulatory clarity, proponents of the bill argue that prohibiting yield-bearing stablecoins is necessary to avoid potential violations of existing securities laws. The ongoing industry discussions surrounding this restriction could lead to amendments being proposed during the markup process.
Coinbase CEO Brian Armstrong has advocated for the inclusion of on-chain interest functionality in stablecoins, arguing that it provides users access to competitive financial tools. He believes that stablecoins backed by short-term US Treasuries could enable users to earn interest directly, similar to an interest-bearing checking account. Armstrong also highlighted the benefits of on-chain interest in democratizing access to higher yields and providing global consumers in underbanked regions with dollar-denominated interest-bearing assets.
The initial pushback against the prohibition of yield-bearing stablecoins may lead to amendments being introduced during the markup session. Despite concerns around investor protection and regulatory clarity, proponents of the bill argue that the restriction is necessary to avoid potential violations of existing securities laws. Coinbase CEO Brian Armstrong believes that on-chain interest functionality in stablecoins is essential for providing users with competitive financial tools and democratizing access to higher yields.
In conclusion, the House Committee on Financial Services is set to review the updated version of the STABLE Act during the markup session on April 2. The bill aims to regulate payment stablecoins through a comprehensive federal framework, with provisions categorizing qualified issuers and prohibiting the issuance of yield-bearing stablecoins. Ongoing industry discussions surrounding this restriction may lead to amendments being proposed during the markup process.
