US President Donald Trump’s bid to make his country the “crypto capital of the world” received a major push after the US House cleared three bills on Thursday, one of which regulates the ‘stablecoins’ currency and has already passed the Senate to be sent to Trump’s desk.
The ‘stablecoin bill’ passed on a 308-122 vote and makes way for consumer protection and guardrails to be set for the cryptocurrency that’s tied to a stable asset, often the US dollar, to reduce price volatility. It had been passed by the Senate with bipartisan support in June.
The bill sketches requirements for stablecoin issuers, including compliance with U.S. anti-money laundering and sanctions laws, and mandates that issuers hold reserves backing the cryptocurrency.
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The other two bills include one that creates a new market structure for cryptocurrency and another that prohibits the Federal Reserve from issuing any new digital currency. These will now go to the Senate next.
The second bill defines what forms of cryptocurrency should be treated as commodities regulated by the Commodity Futures Trading Commission and which are securities policed by the Securities and Exchange Commission. It also aims to provide clarity for how digital assets are regulated.
The third bill, passed on a narrower 219-210 margin, prohibits the US from offering what’s known as a “central bank digital currency,” which is like a government-issued form of digital cash.
Bitcoin climbed 0.6 per cent and touched $120,162.01, according to Bloomberg data, retaining its uptick as it gets a boost in the global cryptocurrency market. Meanwhile, ether surged 6 per cent, reaching $3,628, its highest price since January.
Altcoins have been showing an upsurge as investor confidence increases, buoyed by the US government’s supportive stance to crypto assets.
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House Financial Services Chair French Hill said payment systems were undergoing a “revolution” the world over.
“[The bill will] ensure American competitiveness and strong guardrails for our consumers,” he said.
Patrick McHenry, the former chair of the House Financial Services Committee and now vice chair of the crypto firm Ondo Finance, said the legislation will have a “massive generational impact”.
“These bills will make the United States the center of the world for digital assets,” he said.
The crypto industry has quickly become a major player in Washington, thanks to heavy campaign donations and strong lobbying. While the bill on stablecoin regulation has bipartisan support, Democrats say the legislation should address Trump’s personal financial interests in the crypto space.
“No one should be surprised that these same Republicans’ next order of business is to validate, legitimize, and endorse the Trump family’s corruption and efforts to sell the White House to the highest bidder,” said Maxine Waters, the top Democrat on the Financial Services panel.
A provision in the stablecoin bill bans members of Congress and their families from profiting off stablecoins. But that prohibition does not extend to the president and his family, even as Mr. Trump builds a crypto empire from the White House.
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