US Congressman Tom Emmer is drafting a bill for dividend-producing stablecoins. The draft aims to establish a new regime for such altcoin projects to be registered with the SEC, but this regime will be voluntary.
These altcoin projects are trying to be brought under SEC control
US Congressman Tom Emmer is drafting legislation that addresses dividend-producing stablecoins. The draft requests that ‘stablecoins with a dividend component’ be allowed to register with the Securities and Exchange Commission. More specifically, this term means: A stablecoin that distributes all or part of the income from the investment of assets that support the stablecoin to stablecoin holders.
According to the draft bill, the SEC should establish and issue new rules for its oversight and review regime over such altcoin projects. These should include the types of assets that support these stablecoins and the requirements for their protection.
What is the scope and purpose of the draft?
Critically, the version of the bill does not mandate SEC oversight, even for dividend-producing stablecoins. Given that most of the returns available to stablecoin holders come from third-party lending or betting platforms, it’s unclear exactly how many would accept such a regime.
As a possible example, TerraUSD (UST) holders can earn 20% returns on Anchor, which is run by the same team as Terra, but the tokens do not distribute any dividends. Another example is Ampleforth (AMPL), an algorithmic stablecoin that does something similar to a stock split but without supporting assets. Also, the proposed regime doesn’t seem to apply to a few of the largest stablecoins by market cap, for example Tether (USDT), USD Coin (USDC), or Binance USD (BUSD).
As we covered in the news on Kriptokoin.com, the possibility of regulation for this altcoin type has been a top priority for crypto-focused legislation lately. Financial regulators from the administration of US President Joe Biden are pressing to limit the issuance of asset-backed stablecoins to bank-like institutions.
Republicans like Tom Emmer generally like more open-ended frameworks, including options for recording with different editors. Critics say the on-demand recording will do nothing for regulators to track down bad actors.
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