Policymakers should take a comprehensive, coordinated regulatory approach to stablecoins and other digital assets, ICBA told the House Financial Services Committee.
Statement: In a written statement for a hearing on stablecoins, ICBA said:
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Community bank involvement in digital assets within a rigorous and thoughtful regulatory framework will help mitigate risks presented by stablecoins and other cryptocurrencies.
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Stablecoin risks—which include eroding monetary authority, threatening financial stability, and risking community bank disintermediation—must be addressed by appropriate safety and soundness requirements.
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Congress should ensure stablecoins are subject to appropriate federal prudential oversight that is comparable to regulations that apply to functionally similar payments products and services offered by the banking system.
Lawmaker Comments: During the hearing:
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Committee Chairwoman Maxine Waters (D-Calif.) said policymakers must ensure digital asset innovation is responsible and provides robust consumer and investor protection.
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Ranking Member Patrick McHenry (R-N.C.) said Congress—and the House Financial Services Committee in particular—must develop legislation to direct regulatory action on digital assets. He and other Republicans strongly opposed limiting stablecoin issuance to insured depository institutions.
Treasury Testimony: Testifying at the hearing, Treasury Under Secretary for Domestic Finance Nellie Liang reiterated the President's Working Group report that recommended requiring stablecoin issuers to be insured depository institutions. She testified that tech companies that aren’t licensed banks shouldn’t offer stablecoins that can be used to pay for goods and services.
Next Steps: With the debate continuing, the Senate Agriculture Committee has a hearing scheduled for 10 a.m. (Eastern time) today on digital assets. Commodity Futures Trading Commission Chairman Rostin Behnam—who has urged Congress to consider making the CFTC the primary federal regulator for digital assets—is scheduled to testify.
More: The OCC in November issued an interpretive letter reminding banks that the permissibility of engaging in crypto activities is conditional on them demonstrating that they can do so safely and soundly. Banking regulators separately said they plan to provide greater regulatory clarity on crypto-related activities this year.
