The Senate Banking Committee on Thursday is considering the first-ever digital assets bill from the panel along with a measure aimed at preventing financial institutions from using reputational risk as a means of debanking clients.
"We're excited about the historic nature of this markup, and we're also excited to have Democrats, Republicans working together to democratize this economy to have that blue-collar comeback I've been working on," Chairman Tim Scott, R-S.C., told FOX Business in an interview ahead of the hearing.
The first bill the committee considered, known as the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, was introduced on a bipartisan basis by Sens. Bill Hagerty, R-Tenn., Kirsten Gillibrand, D-N.Y., Cynthia Lummis, R-Wyo., and Angela Alsobrooks, D-Md.
"The GENIUS Act is a bipartisan piece of legislation that I believe can reach the president's desk and become law. It will set the parameters, a light touch on the regulatory framework for stablecoins," Scott said. He added that it will likely set the stage for a broader digital assets market structure bill in the future.
TIM SCOTT INTRODUCES SENATE BILL TO ADDRESS DEBANKING OVER 'REPUTATIONAL RISK'
"I think if you look at the horizon, it's going to be a market structure legislation that follows quickly hereafter," Scott said, adding that he believes the GENIUS Act can pass both chambers of Congress and be signed into law as a standalone measure. "Market structure will be a more complicated opportunity for us to set the parameters. This one's not a layup, but it's a 10-foot shot."
The GENIUS Act aims to create a regulatory framework for dollar-denominated stablecoins. It would define a payment stablecoin as a digital asset used for payment or settlement that's pegged to a fixed monetary value. It would also establish procedures for firms seeking licenses to issue stablecoins, as well as reserve requirements and regulatory standards for issuers.
For issuers with over $10 billion of stablecoins, they would be under the Federal Reserve's regulatory framework for depository firms and the Comptroller of the Currency's framework for nonbank issuers. States would also be authorized to regulate issuers under $10 billion in market capitalization, and firms over that threshold could seek a waiver to remain state-regulated.
SENATE BANKING PANEL HEARS DEBANKING TESTIMONY: 'EXTREMELY DISRUPTIVE'
The Senate Banking Committee is also slated to take up the debanking bill known as the Financial Integrity and Reputation Management (FIRM) Act. It was introduced by Scott and is cosponsored by all the committee's Republican members.
The bill would eliminate references to reputational risk as a measure used to determine the safety and soundness of a financial institution. Reputational risk has been used to debank digital assets firms, as well as other disfavored businesses like those in the firearms industry or cannabis businesses in states with legal marijuana.
It would also eliminate federal banking agencies' ability to advance new rules or guidance using reputational risk to regulate financial institutions, and require those agencies to report to Congress about the elimination of reputational risk in bank oversight.
TRUMP MOVES 'CRYPTO STRATEGIC RESERVE' FORWARD, PROMISES TO ELEVATE INDUSTRY
"The Dems have taken their time walking to the table on this one," Scott said, adding that while the bill is starting off with only Republican support, he expects it will "ultimately be a bipartisan piece of legislation."
"The good news is the issue of debanking is starting to resonate because, frankly, elections have consequences and one of the consequences of this past election is it put a light on the weaponization of the financial footprint and the regulators," Scott said.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
"That calls to the carpet the Biden administration and the Democrats who supported it. So they're looking for an opportunity to separate themselves from the past and from the Biden administration's weaponization of government against people they don't like and against industries they don't approve of," he said.
"This is an opportunity for my friends on the other side, so to speak, to come to the table. Let's make this a bipartisan piece of legislation and just restore common sense."
source https://www.foxbusiness.com/politics/senate-panel-debanking-reform-digital-assets-tim-scott
0 Comments