The House Financial Services Committee has made significant strides in the regulation of cryptocurrencies, advancing two key bills that were previously under consideration. The Clarity for Payment Stablecoins Act and the Keep Your Coins Act were passed on July 28, marking a significant step towards better regulation of stablecoin issuers and a positive development for crypto self-custody in the United States.
These legislative moves come on the heels of the Committee’s earlier approval of the Financial Innovation and Technology (FIT) for the 21st Century Act and the Blockchain Regulatory Certainty Act on July 26. These bills were respectively established when crypto firms had to register with regulators and set guidelines for projects such as miners and decentralized finance (DeFi) platforms. The FIT for the 21st Century Act also passed the House Agriculture Committee on July 27.
The Clarity for Payment Stablecoins Act aims to provide regulations on the issuance of payment stablecoins, digital tokens that draw their value from a peg to a fiat currency or commodity. The Keep Your Coins Act seeks to ensure that crypto users are allowed to maintain custody of their assets in self-custodial wallets, a key aspect of the decentralization ethos of the crypto industry.
The crypto industry has largely supported both bills, with many executives testifying in June that their passage was crucial to ensure the U.S. remains a favorable environment for crypto innovation. Coinbase chief policy officer Faryar Shirzad marked it as a “big step forward” for consumer protection.
However, the bills have faced criticism from Democrats who believe they are too favorable to the crypto industry. Rep. Patrick McHenry (R-NC), the chairman of the House Financial Services Committee, expressed disappointment that an agreement with Democrats on the committee remained elusive. He blamed the White House for the impasse, accusing it of being unwilling to find a middle ground on certain provisions of the Clarity for Payment Stablecoins Act of 2023.
The measure follows a bipartisan campaign initiated last year by Senators Cynthia Lummis and Kirsten Gillibrand to pave the road for more crypto-friendly rules in the US. To clarify the difference between digital assets, which are commodities and securities, they proposed a new law called the “Responsible Financial Innovation Act.” However, the bill wasn’t passed and has been re-introduced.