cryptojournalist
What’s Holding It Back?
Former Senator Pat Toomey says stablecoin regulations are stuck because some major questions haven’t been answered yet. These include:
What happens if a stablecoin company goes bankrupt?
How much money do they need to keep in reserves to back their coins?
Will bank deposits tied to stablecoins be insured?
Who will oversee it all—state or federal regulators?
Toomey also pointed fingers at the Federal Reserve, saying they’re not supportive of crypto, which has slowed things down. Still, he’s hopeful lawmakers will revisit stablecoin rules in 2025 after tackling other priorities like budgets and appointments.
Push for Clear Rules
There’s growing pressure for better stablecoin regulations. Senator Bill Hagerty’s Clarity for Payment Stablecoins Act is one potential solution. It proposes that smaller stablecoin companies (under $10 million market caps) be regulated at the state level instead of by federal agencies.
Industry leaders are also sounding the alarm. Chris Dixon from a16z warned that without clear policies, the industry risks a major collapse, like the FTX scandal, which could hurt not just crypto but the broader economy too.
Impact on the Treasury
Stablecoin companies are buying more government securities, like Treasury bills, to back their coins. While the impact on the Treasury market is small now, it’s growing. In October, a Treasury committee member even suggested creating a private blockchain to manage this rising demand.
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