The Digital Chamber Pushes for Immediate Stablecoin Legislation

The Digital Chamber, a blockchain advocacy group, has urged U.S. lawmakers to take "immediate action" to pass a stablecoin bill, as stablecoin adoption accelerates.

In its newly released report titled "How Stablecoins are Extending U.S. Dollar Dominance," the group highlighted the growing use of stablecoins and called for swift legislative action to keep pace with this trend. According to the report, stablecoins are increasingly being used for savings and cross-border payments.

This week, the Digital Chamber is set to meet with leaders from the Federal Reserve, the Office of the Comptroller of the Currency, and key members of the House Financial Services and Senate Banking committees. The report, citing data from Castle Island Ventures, noted that over 98% of the $170 billion in stablecoins currently in circulation are pegged to the U.S. dollar, with stablecoin transaction volume surpassing $20 trillion over the past year.

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The report emphasized that USD-linked stablecoins are crucial for extending the global dominance of the U.S. dollar, expanding access to dollar-denominated assets in new markets, and safeguarding national security interests. It further argued that U.S. dollar-backed stablecoins enhance financial freedom while leveraging the national currency, positioning cryptocurrencies as tools of economic influence rather than threats to it.

The Digital Chamber warned that the U.S. has yet to develop a comprehensive regulatory framework for stablecoins, which has allowed international competitors to advance their own policies, potentially challenging the U.S. dollar's status as the world’s reserve currency.

The report reviewed three legislative proposals — two from the Senate and one from the House. In the House, efforts by Financial Services Committee Chair Patrick McHenry, who is soon retiring, and top Democrat Maxine Waters, faced a hurdle over a provision allowing state regulators to approve stablecoin issuances without Federal Reserve oversight.

On the Senate side, Senator Bill Hagerty (R-Tenn.) introduced draft legislation in October that aligns closely with House efforts, while Senators Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.) put forward their own stablecoin bill in April.

The report also included policy recommendations with insights from Castle Island Ventures' Nic Carter and other Digital Chamber members. Recommendations included permitting both banks and non-banks to issue stablecoins, ensuring stablecoins are not classified as securities, and mandating a 1:1 asset backing, among other proposals.

The Digital Chamber's latest report comes amid growing interest in cryptocurrencies across the U.S., with the sector expressing renewed hope for balanced crypto regulation ahead of the 2024 U.S. presidential election.

President-elect Donald Trump, who has been supportive of digital currencies, pledged during his campaign to introduce crypto-friendly regulations. At the Bitcoin 2024 Conference, Trump stated, "We will have regulations, but from now on, the rules will be written by the people who love your industry, not hate your industry."