Draft Bill Lets Nonbanks Issue Stablecoins, Bans Algorithmic Coins for Two Years

Nearly finalized legislation between Democrats and Republicans on the House Financial Services Committee would authorize the Federal Reserve to license nonbank stablecoin issuers and introduce a two-year moratorium for algorithmic stablecoins. 

House lawmakers have worked behind the scenes for months in an effort to create a bipartisan legislative framework for stablecoins, a type of digital asset designed to maintain consistent value  in order to facilitate cryptocurrency transactions. 

The latest draft is the product of weeks of back-and-forth between Democrats and Republicans. The legislative text, reviewed by American Banker on Tuesday night, was drafted by the office of House Financial Services Chair Maxine Waters, D-Calif., and reflects negotiations with ranking member Patrick McHenry, R-N.C.  It remains unclear whether McHenry will support the latest draft. Representatives for McHenry and Waters did not immediately respond to a request for comment, but McHenry told Politico that he was "cautiously optimistic" that an agreement could be reached by the end of the 117th Congress.

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