Representative Tom Emmer is drafting legislation addressing stablecoins.
The draft bill will allow “dividend stablecoins” to register with the SEC.
More specifically, the term refers to “a stablecoin that distributes all or part of the proceeds from the investment of assets that support the stablecoin to stablecoin holders.”
According to the draft, the SEC should establish and issue new rules for inspection and review of these types of coins.
This version of the bill, seen by The Block, does not mandate SEC oversight, even for dividend-bearing stablecoins. Given that most of the returns for stablecoin holders come from third-party lending and staking platforms, it is not entirely clear what this bill will encompass.
For example, owners of TerraUSD (UST) can earn 20% returns on Anchor, which is operated by the same team as Terra. However, tokens do not distribute profits. Likewise, Ampleforth (AMPL) is an algorithmic stablecoin that does something similar to a stock split but without supporting assets. However, the proposed law does not seem to apply to some of the largest stablecoins by market cap (USDT, USDC and BUSD).
Stablecoin regulation has recently become one of the top priorities for crypto-focused legislation. The Biden administration’s financial regulators are pushing to limit stablecoin issuance to bank-like institutions.
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