Bipartisan Legislation Regulating “Stablecoin” Cryptocurrencies Pushed Back Until After August Recess

Bipartisan legislation for establishing regulations on certain forms of cryptocurrency known as stablecoins has been pushed back until after Congress returns from its August recess.

Rep. Maxine Waters (D-CA) announced on Wednesday that the House Committee on Financial Services would delay its release of legislation establishing regulations for managing stablecoins, a form of cryptocurrency that determines its value in relation to the U.S. dollar or other currencies, until after the August recess.

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“Although the Ranking Member, Secretary Yellen, and I have made considerable progress towards an agreement on the legislation, we are unfortunately not there yet, and will therefore continue our negotiations over the August recess,” said Waters, the chairwoman of the Financial Services Committee, in a statement. “It’s critical that we continue moving the ball forward on this so we can have a regulatory framework that protects consumers while allowing for responsible innovation. I look forward to coming to an agreement in the near future and marking up bipartisan legislation when we return from recess.”

The committee was expected to advance a bipartisan bill focused on creating guardrails for stablecoins on Wednesday. These include requirements that stablecoin issuers maintain 100% reserves and not lend stablecoins to customers, according to Bloomberg. The rules would also determine the types of assets that can back stablecoins and bar commercial companies from issuing stablecoins.

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Crypto assets have gained additional attention in recent months from lawmakers after multiple cryptocurrencies dropped in value in May, causing a crypto winter in the marketplace.

The regulations would follow the European Union’s newly passed rules regarding the “Wild West” crypto market. These rules forced cryptocurrency companies to get a license and implement customer safeguards in order to sell digital tokens in Europe.