Jerome Powell Advocates for Stablecoin Legislation by Year-End

During a hearing in front of the House Committee on Financial Services, Federal Reserve Chair Jerome Powell expressed strong support for passing stablecoin legislation before the end of 2024.

Powell emphasized the Federal Reserve’s commitment to working with Congress to create a suitable regulatory framework for stablecoins, highlighting its importance for transaction stability and security in the US.

In April, Senators Cynthia Lummis and Kirsten Gillibrand introduced the Lummis-Gillibrand Payment Stablecoin Act, a bipartisan bill aimed at regulating payment stablecoins. The bill focuses on protecting consumers and fostering innovation while maintaining the dominance of the US dollar.

It defines “payment stablecoins” as crypto assets intended for use as a medium of exchange, redeemable for a fixed amount of US dollars, or maintaining a stable value equivalent to the US dollar, excluding those pegged to non-US dollar assets.

The proposed legislation has received mixed reactions. While some praise it for bringing order to the industry, others, like the crypto advocacy group Coin Center, criticize it for potentially stifling innovation. Coin Center CEO Jerry Brito supports the regulation but is concerned about the bill’s impact on innovation and free speech.