Over the weekend, a group of nine pro-crypto Senate Democrats announced their opposition to the current version of stablecoin legislation, marking a significant shift that could stall its progress. Although several members of the group had previously supported an earlier draft, they now say they cannot vote for the bill unless it includes stronger provisions addressing anti-money laundering, oversight of foreign issuers, national security concerns, the stability of the financial system and accountability for non-compliant issuers.
This marks the first major obstacle for the legislation, which had been moving swiftly through both the House and Senate. To advance in the Senate, the bill will now need the support of at least seven Democrats.
Background:
Lawmakers are pushing to pass stablecoin legislation this Congress to establish a clear regulatory framework for these digital assets, which are designed to maintain a stable value by being pegged to the U.S. dollar and other highly liquid assets. IBAT has consistently raised concerns that, if not handled correctly, stable coin legislation could lead to a flight of deposits from the banking system, the improper blending of commerce and finance and outright competition with banks through issuer access to a Federal Reserve Master Account.
