House Bill Might Place a Two-Year Ban on Stablecoins like TerraUSD
On Tuesday, September 20th, a report came out indicating that the House is drafting a new piece of crypto regulation. The bill may come to a vote already next week and is likely to place a ban on algorithmic stablecoins.
House Bill May Ban Terra-Like Stablecoins for 2 Years
The bill that is being drafted by the House should allegedly primarily address the matter of Terra-like stablecoins. The legislation in question is in some ways the continuation of the lawmakers’ worries over stablecoins expressed in the 2021 Financial Stability Oversight Council Annual Report.
The group that published the report was especially worried about stablecoins, and some of the worries were confirmed earlier this year when the LUNA stablecoin dramatically collapsed. The House bill is allegedly meant to address the threat algorithmic stablecoins might pose.
The bill will likely entail a two-year ban on the creation and issuing of new “endogenously collateralized stablecoins.” Additionally, this legislation might call on the Treasury to conduct a study on Terra-like coins. The study would allegedly also require cooperation with other agencies like the FED and the SEC.
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A Busy Month for Crypto Regulators
The alleged bill being drafted in the House is just the most recent of various legislative and regulatory moves the US government and its agencies are undertaking. On Monday, September 20th, the Department of Treasury issued a call to the public to comment on the future of crypto regulation.
On Friday, the White House joined the legislative effort regarding digital assets for the first time and published a framework for future regulation. This Presidential guidance might prove very welcome, as just a day earlier Senator Tom Emmer publicly criticized the SEC—the agency that has so far been in the spotlight when it comes to crypto regulation—over its own lack of transparency when it comes to digital-assets-related actions.
On the other side of the front, various crypto firms have also become active in crypto regulation. Last week, the Blockchain Association, a coalition of large companies like Binance.us and Kraken, created a political action committee (PAC) hopeful it will help bring pro-crypto candidates into office during the upcoming midterm elections.
Do you think the bill will really end up banning stablecoins? Let us know in the comments below.