ABA, associations: Regulate stablecoins like banks, cooperative credit union

State-certified payment stablecoin companies must undergo a minimum of the very same type of guidance from a federal regulator as state-chartered banks and cooperative credit union, the American Bankers Association, the Consumers Bankers Association and the Credit Union National Association stated today. In a joint letter to the leaders of the House Financial Services Committee, the associations raised issues about proposed legislation from Chairman Patrick McHenry (R-N.C.) to manage stablecoin companies. 

The proposed expense “imposes critical limits on the role of a federal regulator to approve and supervise state-licensed payment stablecoin issuers and creates a regulatory arbitrage opportunity for nonbank entities to shop for the ‘best’ regulatory regime by state,” the groups stated. “Further, it is unlikely that states are prepared to regulate stablecoins on their own, especially given stablecoin issuers’ capacities to quickly scale into global stablecoins that facilitate international payments.” 

The associations stated that any stablecoin legislation must mandate tests and audits for stablecoin companies. The proposed expense “stops short of requiring supervisory exams or third-party audits, critical tools to ensure accountability and compliance with established rules and law,” they stated. The legislation likewise must forbid or offer constraints on a non-financial industrial business owning or managing a payment stablecoin provider, as such constraints are important for safeguarding customers from possible self-dealing or disputes of interest, they included.


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