Hi -- I wanted to share this article from "Politico" on a new crypto bill I will be introducing in the coming weeks. My legislation will help provide certainty and security to investors without thwarting innovation.
Here is a link to the article and it is pasted below: [link removed]. I look forward to hearing your thoughts. Thanks and have a great week!
Yours,
Josh
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Politico Pro: Gottheimer drafts stablecoin bill as Congress plots crypto rule revamp
BY: ZACHARY WARMBRODT | 02/02/2022 12:57 PM EST
Rep. Josh Gottheimer is close to introducing a bill that would create a new regulatory regime around stablecoins, as Congress ramps up work on rules for the booming cryptocurrency market.
The New Jersey Democrat said in an interview that the bill he plans to release in the coming weeks would require a stablecoin issuer to either become a bank — in line with recommendations issued by federal financial regulators — or to partner with a bank. Stablecoins are a form of cryptocurrency whose value is tied to other assets, such as the U.S. dollar.
“It defines stablecoins in a way that carves them out from more volatile cryptocurrencies,” he said.
The big picture: Gottheimer's bill is part of an emerging flurry of legislation targeting crypto, kicking off what is expected to be Congress' most active year yet in grappling with rules for digital assets. Gottheimer, a member of the House Financial Services Committee, said he expects the panel to hold crypto hearings in the first quarter.
“The committee's going to be active this year on this,” he said. “I'm hearing there's a lot of interest. I talked to the chairwoman [California Democrat Maxine Waters] about it at length. She's certainly interested. I see a lot of opportunity for action.”
What it means for stablecoins: Gottheimer's bill represents support for the view that firms issuing stablecoins should be subject to bank-like regulation, an approach recommended by the Treasury Department and other financial agencies. SEC Chair Gary Gensler has said some stablecoins would face regulation as securities and investment companies.
“I don't see see a stablecoin in this perspective as a security, per se,” Gottheimer said. “It can be used in different transactions. It's not how I look at it.”
A big concern that regulators have expressed about stablecoins is that they could be subject to runs, with stablecoin holders rushing to redeem their tokens for dollars and creating the risk of broader financial market instability. Gottheimer said his plan would mitigate systemic risks. Some stablecoin firms such as Circle are already seeking bank charters.
Under Gottheimer's bill, a stablecoin issuer could take on oversight from regulators by operating like a traditional bank with deposit insurance. The alternative option would be to hold reserves at a bank in a segregated account. The reserves would need to have one-to-one reserves in U.S. dollars or “extremely liquid, short-term instruments,” in particular U.S. Treasurys, he said.
Gottheimer's approach to crypto: “We need to act and provide certainty here if we're going to lead the way,” he said. “Certainty's the key to leadership, and I'm worried that right now you've got Bermuda and the Bahamas and France and other places drawing investors and currencies because we have not acted with the alacrity that we should.”
“The key is harnessing the innovation while ensuring safety and soundness for investors,” he said.
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Josh Gottheimer for Congress
PO Box 584
Ridgewood NJ 07451 United States
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