Congress Delays US Stablecoin Bill Till After August Recess

Legislation meant to establish a regulatory regime for stablecoins in the U.S. has been pushed back to after the August recess.

Rep. Maxine Waters (D-CA) confirmed in a statement that congress will continue negotiations after the August recess.

Waters thinks that the bill will protect “consumers, while allowing for responsible innovation.”

The bill was initially expected to move forward yesterday as part of bipartisan work between waters and Rep. Patrick McHenry (R-NC).

The piece of legislation reportedly aims at stablecoin issuers, like Tether and Circle, to maintain 1:1 reserves of their stablecoins in circulation and would also limit the types of assets that could back these stablecoins.

The delay follows reports that Treasury Secretary Janet Yellen raised concerns over how the proposed bill addressed questions over the custody of digital assets.

The proposed regulation around stablecoins has gained renewed urgency in the wake of the collapse of algorithmic stablecoin UST earlier this year.

At the time, Yellen issued an “urgent” call for stablecoins to be regulated this year. She argued that the run on UST “illustrates that this is a rapidly growing product and there are rapidly growing risks.”