As the Republican and Democrat parties struggle to enact clear rules for the sector, the U.S. faces the threat of delays in stablecoin regulation at the federal level amid competing jurisdictions around the world.
The concern was highlighted in an interview with club vice president Yam Kee Chan. Decrypt At Korea Blockchain Week on Wednesday, he was discussing global regulatory shifts.
“Major regions around the world have set a minimum baseline for what a well-regulated, stable coin looks like,” Chan said. “What hasn't quite caught up yet is the United States at the national level.”
That is at odds with other laws around the world, including the EU's MCA rules and Hong Kong's stablecoin framework, which have begun to establish a national unified approach for those regions.
In the US, many states regulate stablecoin issuers through their existing money transfer laws, which also apply to payment services such as Apple Pay, Google Pay, and PayPal.
Those issuers must obtain financial licenses in individual states, leading to a fragmented landscape that raises compliance costs, stifles innovation and complicates expansion across the US.
“What's important is for the US to reform and have a structure to define what a well-regulated, stable currency looks like,” he said.
In the year In July 2023, the US House Financial Services Committee approved a bipartisan stablecoin bill known as the “Transparency of Payments Stablecoins Act of 2023.”
The bill aims to create a regulatory framework for stablecoins in the US to address issues such as consumer protection, financial stability and the roles of federal and state regulators.
While approved in committee, the bill still has to go through additional legislative processes, including approval by the House and Senate, before becoming law.
The problem, Chan said, is that despite bipartisan agreement on the policy aspects of the bill, the political process in the U.S. involves negotiating, negotiating and dealing with other unrelated issues to get enough support to pass the bill through Congress.
This “issue trading” refers to the deals and agreements made to move the legislation forward, even when there is consensus on policy.
“Here's the thing about American politics. There are policies, and then there are politics,” said Chan, whose company Circle, the market's second-largest stablecoin, is known for pegging the USDC to the US dollar.
Asked if he believes the upcoming US election in November will jeopardize the outcome of clear crypto regulations, including the passage of the stablecoin bill, he said the executive moment represents an opportunity to reprioritize and shape the national conversation.
“Those of us who follow those talks can see that convergence,” Chan added.
Chan filed an ad last month for Sen. Chuck Schumer (D-NY), who vowed to pass it. crypto law At the end of the year.
Chan said Schumer's “bold move” to announce it showed a shift in the political consciousness around crypto, though he didn't give further details on what it would look like at the time.
“We have a lot of private companies working with us who are talking to regulators. This is not a ‘go it alone' conversation,” he said. “It's important to understand how it benefits us legally. What kind of danger are we creating? “
It is also important for the regulators to have some visibility in the market, he added, stressing that while it is important to “push the limits” in terms of innovation, it is also important not to stray too far from the rules.
“This is a very, very difficult thing,” Chan said.
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