ABA Statement for the Record to the House Subcommittee re Stablecoin

The American Bankers Association (ABA) appreciates the opportunity to provide a Statement for the Record for this hearing, Putting the ‘Stable’ in ‘Stablecoins:’ How Legislation Will Help Stablecoins Achieve Their Promise. Stablecoin issuance is, in effect, a monetary exercise comparable to what regulated banks do, and it should be supervised accordingly to ensure financial stability and consumer protection. We appreciate the House Financial Services Committee’s work to develop legislation to regulate stablecoin issuers. Two pieces of draft legislation – H.R. __, To provide for the regulation of payment stablecoins, and for other purposes (Chairman’s Draft) and H.R. __, To provide requirements for payment stablecoin issuers, research on a digital dollar, and for other purposes (Ranking Member’s Draft) – are attached to this hearing, and we offer comments on both in this statement.

Stablecoins, which seek to maintain a 1-to-1 peg with a reference asset often by holding reserves as collateral, are unique among digital assets in that their intended stable value positions them as a functional alternative to a traditional deposit account. As such, it is critical that the stablecoin ecosystem, like the banking ecosystem, is subject to oversight that ensures financial stability and consumer protection. Such oversight must put the “stable in stablecoin,” as the title of this hearing suggests. Unfortunately, despite agreeing with several areas of the draft, we do not believe the Chairman’s Draft accomplishes that goal.