The House Financial Services and House Agriculture Committees have advanced bills actively seeking to provide a clear regulatory framework to govern the crypro and stablecoin market.
In 2023, the crypto industry witnessed a substantial surge in lobbying efforts aimed explicitly at shaping stablecoin regulations and influencing legislative outcomes in the United States, Bloomberg reported.
According to the report, lobbying on stablecoin legislation experienced a significant uptick this year, with 161 reports – a remarkable 79% increase compared to last year.
The Rise of Stablecoins and Regulatory Urgency
For clarity, Stablecoins are a type of digital asset that serves as a bridge between the traditional financial industry and the emerging economy. These digital assets gained heightened significance for their supposed backing by reserve assets like treasuries, bonds, and even fiat currencies such as the US dollar, European euro, and Mexican pesos.
Due to their supposed role in connecting both traditional finance and the crypto market, lawmakers in the United States have accelerated their efforts to provide a clear regulatory framework for governing the use of this asset class.
Both Democrats and Republicans, alongside the Biden administration, prioritized oversight of stablecoins this year. The bipartisan commitment remained strong despite disagreements on other digital asset-related issues following the collapse of Sam Bankman-Fried’s crypto empire FTX.
Tether and Coinbase Global Join Lobbying Efforts
As per the Bloomberg report, several crypto firms, alongside traditional financial giants like Bank of America and Visa, engaged in lobbying efforts to influence legislative outcomes on Capitol Hill.
One of the crypto companies, Tether, the issuer of the leading stablecoin USDT, spent $760,000 during the first three quarters of 2023. The contribution placed the company as the sixth-highest spender among crypto firms.
The company’s major rival, Circle Financial, also spent approximately $300,000 during the same period compared to the $270,000 it spent in 2022. Invariant LLC represented the company.
Coinbase Global Inc (NASDAQ: COIN), on the other hand, emerged as the top spender overall on all issues, dedicating a portion of its $2 million expenditure to advocate for stablecoins rules. The Bank of America, Visa, and the US Chamber of Commerce also joined for the same issues as Coinbase.
The House Financial Services Committee emerged as a focal point for the stablecoin debate, actively advancing a bill in July. However, according to US Rep. French Hill (R-Ark.), the bill could be delayed until next year before making any progress.
US Needs Crypto Bills to Expand Its Market
In a statement emailed to Bloomberg, Bill Hulse, Senior Vice President at the US Chamber of Commerce Center for Capital Markets Competitiveness, emphasized the importance of introducing crypto bills to the US market.
According to him, policymakers in the country should provide comprehensive regulations for payment stablecoins to foster expansion within the United States’ digital assets market. Despite the country’s position in the financial market, the US is yet to agree on a law that could foster the adoption of digital assets, unlike Europe, which is working to provide a clear regulatory framework called MiCA for all things crypto.
Meanwhile, while stablecoins gained significant attention from lawmakers in the region this year, the crypto industry’s lobbying efforts extended beyond the asset class. Digital assets companies spent around $19.3 million within the first nine months of 2023, topping the previous high of $15.6 million during the same period last year.
The House Financial Services and House Agriculture Committees have advanced bills actively seeking to provide a clear regulatory framework to govern the market.
