The United States House of Representatives Committee on Financial Services will hold a hearing on stablecoin regulation on April 19. The hearing follows the announcement of a new draft bill in the House to provide a framework for stablecoins regulation. Some of the speakers invited have released advance transcripts of their planned testimony.
Stablecoins “look a lot like pretty basic cash instruments. […] Stablecoins are actually mundane,” Austin Campbell, a managing partner at Zero Knowledge Consulting and adjunct professor at Columbia Business School, will tell the committee. Campbell is convinced that stablecoins will expand the reach of the U.S. dollar and increase financial inclusion if legislation does not derail their progress.
According to Campbell, the United States has a lot to lose from driving stablecoin issuers away:
“The biggest winner of the US regulatory actions and legislative inaction over the past year has been Tether, an offshore stablecoin that provides very little in the way of transparency or consumer protection.”
Blockchain Association chief policy officer Jake Chervinsky will call stablecoin “a revolutionary upgrade” of the traditional payment systems. Like Campbell, Chervinsky touts dollar-denominated stablecoins as increasing financial inclusion and preserving the dollar’s role in the international economy.
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Neither the Securities and Exchange Commission (SEC) nor the Commodity Futures Trading Commission (CFTC) currently have the regulatory authority necessary to regulate stablecoin, Chervinsky argued. It is hard to construe stablecoin as a security, Chervinsky said, and the CFTC lacks the jurisdiction to oversee spot markets.
Absolutely sensational testimony from @CampbellJAustin who will be testifying in the House hearing on stablecoins tomorrow. Probably the single best document I’ve read that makes the case for stablecoins as favorable to US interests https://t.co/kuQcTR9sCk
— nic c4rter (@nic__carter) April 18, 2023
Legislation of stablecoin should follow eliminate competition between regulatory agencies, Chervinsky said:
“At the federal level, stablecoins should be overseen by a prudential regulator such as the Fed or the OCC. […] Stablecoins should also be exempt from overlapping federal regulation by the SEC or the CFTC, so as to provide regulatory clarity and clear delineation of responsibility between agencies.”
New York State Department of Financial Services Superintendent Adrienne A. Harris, Circle chief strategy officer and global policy head Dante Disparte and Consumer Reports director of financial fairness Delicia Reynolds Hand will also testify before the hearing.
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