State-licensed payment stablecoin issuers should be subject to at least the same form of supervision from a federal regulator as state-chartered banks and credit unions, the American Bankers Association, the Consumers Bankers Association and the Credit Union National Association said this week. In a joint letter to the leaders of the House Financial Services Committee, the associations raised concerns about proposed legislation from Chairman Patrick McHenry (R-N.C.) to regulate stablecoin issuers.
The proposed bill “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 said. “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 said that any stablecoin legislation should mandate exams and audits for stablecoin issuers. The proposed bill “stops short of requiring supervisory exams or third-party audits, critical tools to ensure accountability and compliance with established rules and law,” they said. The legislation also should prohibit or provide limitations on a non-financial commercial company owning or controlling a payment stablecoin issuer, as such restrictions are critical for protecting consumers from potential self-dealing or conflicts of interest, they added.
