Lawmakers are hitting the ground running with crypto legislature as the year presses on. A new bill introduced in Congress continues the growing trend of U.S. lawmakers gravitating toward digital currency policy. This new piece of legislature, if passed, would greatly influence crypto innovation in America. Focused primarily on stablecoins, the crypto regulation news signals once again that lawmakers on Capitol Hill have a great interest in generating crypto policy of some kind in 2022.
Members of the House of Representatives have a new crypto bill to pore over. But of course, this isn’t huge news in and of itself; Congress has had 35 pieces of potential crypto legislature introduced in 2021 alone. But unlike last year, there seems to be an air of urgency among policymakers. Therefore, there’s a greater sense that this legislature must actually come to fruition. This sense stems from a multitude of factors. For one, many other global powers are starting to embrace and regulate crypto individually; India and Russia are among the many countries currently drafting up infrastructure for their own crypto policies.
Moreover, the amount of crypto investors in America is increasing vastly. Over 13% of Americans have bought or sold cryptocurrency in the last year. There is a serious need, then, to set standards for cryptocurrency taxation; investors are having a hard time navigating this tax season due to questions on what or what not to report when it comes to crypto gains.
One of the biggest areas of interest for politicians is stablecoins. Indeed, cryptocurrencies pegged to the U.S. dollar are quite popular among DeFi investors. But, these stablecoins aren’t protected, nor are their investors, and there is significant risk involved in investing in them.
Crypto Regulation News: New Jersey Lawmaker Seeks to Foster Stablecoin Innovation
Today’s crypto regulation news focuses in on the world of stablecoins and how to protect those that invest in them. A lawmaker is introducing a bill that will, if passed, help to foster innovation in the space without creating risk.
The bill, called the Stablecoin Innovation and Protection Act of 2022, was introduced to lawmakers today by New Jersey Representative Josh Gottheimer. Gottheimer, a member of the House Financial Services Committee, is introducing the legislature to prevent the stifling of stablecoins, but also to help policymakers define what a “qualified” stablecoin is. In the discussion draft of the bill, Gottheimer defines a qualified stablecoin as a digital currency that can be redeemed for USD on a one-to-one basis; only either insured depository institutions or non-bank qualified issuers must issue these currencies.
Through this new bill, Gottheimer hopes to insure stablecoin investors from volatility. Under the parameters of the bill, stablecoin issuers will have to enable investors to swap their crypto for USD on demand. It also would, through its “qualified” definition, give certain stablecoins a “seal of approval” by the U.S. government. The bill would in turn push investors more toward these currencies rather than unqualified ones.
As news of the bill makes its rounds on social media, it is getting significant support from blockchain influencers and organizations alike. Sam Bankman-Fried, founder of the FTX exchange, calls Gottheimer’s bill an exciting move; the bill is also seeing support from the Blockchain Association, who calls it “the most well-thought-out stablecoin legislation we’ve seen.”
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.