#287—U.S. Senators are drafting a stablecoin bill

What isn’t in the works: a U.S. CBDC

Mar 11, 2024

Welcome to Yaka Stuff, our weekly newsletter that covers news, industry perspectives, and updates from the Hard Yaka ecosystem. Check out our last report here.

This week:

U.S. Senators are drafting a stablecoin bill
What isn’t in the works: a U.S. CBDC
NYCB is doing OK now
Stuff happens

1. U.S. Senators are drafting a stablecoin bill

Senators Cynthia Lummis and Kirsten Gillibrand have apparently been working on the bill for “several months,” according to Axios who got the scoop:

Why it matters: Stablecoins, cryptocurrencies designed to maintain a consistent price, usually pegged to the dollar, are a $140 billion market, but often cited as risks to U.S. anti-money laundering an counter-terrorism rules.

Law that would govern stablecoins has been considered the most likely piece of legislation to pass the U.S. Congress for some time.

Between the lines: "Senators Lummis and Gillibrand have been working for several months on a bill that provides regulatory clarity around stablecoins while protecting consumers from bad actors," spokespeople for both senators' offices said in a statement to Axios.

"They have been encouraged by the feedback they have received from several stakeholders and are hopeful to have an announcement soon."

Inside the room: A source familiar with the matter tells Axios that staff at the New York Department of Financial Services, the Federal Reserve, Treasury and the National Economic Council have provided technical assistance on the Senate version.

The senators' offices are said to be in conversation with the leadership of the House Financial Services Committee.

Relevant:

DeFi needs institutions — and regulation

2. What isn’t in the works: a U.S. CBDC

That’s according to Fed chief Jerome Powell. He further emphasized that the Fed itself had no interest in managing such a product.

Here’s Reuters:

Federal Reserve Chairman Jerome Powell significantly downplayed the possibility of the central bank issuing its own digital currency, and said if it ever came to pass, the government would play a limited role.
Testifying before Congress Thursday, Powell said policymakers were "nowhere near" taking action on adopting such a tool.
“People don’t need to worry about a central bank digital currency, nothing like that is remotely close to happening anytime soon," he told the Senate Banking Committee.
He added that the Fed has no interest in establishing accounts for individuals that would compete with the banking system, and it would not support any Fed monitoring of personal financial transactions.
"If we were to ever do something like this, and we’re a very long way from even thinking about it, we would do this through the banking system, the last thing...we the Federal Reserve would want would be to have individual accounts for all Americans," he said.

Relevant:

3. NYCB is doing OK now

Here’s Bloomberg:

Mnuchin’s Liberty Strategic Capital led a group of investors that injected more than $1 billion into New York Community Bancorp while effectively taking control of the ailing lender to apartment landlords. The deal, announced Wednesday, installed former Comptroller of the Currency Joseph Otting as chief executive officer.
The intervention sent the troubled lender’s stock soaring, giving their coalition an instant paper profit and a shot at earning billions more.

4. Ecosystem updates: What’s next for GlobaliD

GlobaliD teased a flurry of new features that are right around the corner including a more streamlined onboarding experience, decentralized messaging with WhatsApp and Telegram integration, and its enhanced non-custodial wallet.

Here’s new CEO and co-founder Mitja Simcic from the announcement:

Trust is the foundational building block of any society, but today, trust is at an all-time low — in our companies, our governments and institutions, and in each other. The reality is that many of our antiquated trust systems have simply broken down as we’ve seen decades of digitization across every industry.
At GlobaliD, we’re building the tools that will rebuild trust not only for today, but the many challenges of tomorrow — all while keeping the keys of the castle with the person that matters most: You.

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