Earlier this week, a working group that includes several financial regulators under the chairmanship of Joe Biden met to discuss the regulation of stable coinsand an anonymous official told Coindesk that the legislative package could become law by the end of the year.
The source said it would define stablecoins for US regulatory purposes and address how they are used.
The collapse of the TerraUSD algorithmic stablecoin It sent shockwaves through the cryptocurrency market and drew the attention of regulators to better control the technology and protect users.
The task force meeting was designed to allow regulators to review recent events in the stablecoin industry, including algorithmic stablecoins, the official said. He also intends to engage participants in efforts to pass the legislation this year.
According to Coindesk, the government official said regulators saw a need for bipartisan support. While they haven’t addressed the legislation in the Senate, the ranking member of the Senate Banking Committee, Pat Toomey (R-Pa.), has already hinted that there could be a stablecoin law by the end of 2022.
Speaking at CoinDesk’s Consensus 2022 conference earlier this month, Toomey, who also showcased his own stablecoin project, said he was aware that the administration of US President Joe Biden, was interested in passing stablecoin regulation.
Any bill that is introduced must be approved by both the House and the Senate.
A central point of discussion was how efforts could be brought together to bring stablecoin legislation into effect before the end of the year. The legislative package is expected to provide a legal definition of stablecoins and their use.
Talks on regulating stablecoins began in November 2021, following a report from the President’s Task Force on Financial Markets.
In the Biden administration officials’ report, the group called on Congress to introduce regulatory oversight and a formal market framework to protect investors, issuers and brokers. This also included legislation restricting the institutions that can issue stablecoins.
Gary GenslerChairman of the US FED and a member of the Working Group, added that stablecoins must be subject to AML/CFT standards.
He stated that legislation must ensure that stablecoins are placed under federal regulatory frameworks.