The House Committee on Financial Services has announced that the markup session for the STABLE Act will be held on April 2. The revised version of the bill, known as the Amendment in the Nature of a Substitute (ANS), will be reviewed during this session. The updated draft includes refined definitions, strengthened compliance mechanisms, and criteria for issuer qualification.
One of the key provisions of the STABLE Act is the prohibition of yield-bearing stablecoins. This has sparked debate within the industry, with some arguing that yield-bearing stablecoins offer important financial tools for users. However, proponents of the bill argue that the prohibition is necessary to ensure investor protection and regulatory clarity, as yield-bearing instruments may fall under existing securities laws.
Coinbase CEO Brian Armstrong has advocated for the inclusion of on-chain interest functionality in stablecoins, citing the potential benefits for users. He believes that stablecoins backed by short-term US Treasuries could provide users with access to higher yields, similar to an interest-bearing checking account, without the need for the issuer to act as a bank. Armstrong also highlighted the potential benefits for global consumers in underbanked regions, who could benefit from dollar-denominated interest-bearing assets.
Despite the initial pushback against the prohibition of yield-bearing stablecoins, there is still a possibility for amendments to be introduced and debated during the markup process. The outcome of these discussions will determine the future regulatory framework for payment stablecoins in the United States.