Blockchain & Digital Asset Litigation Update

Pending Legislation Provides Hopeful Signs for a Stablecoin Regulatory Regime

It has been a truism for years that the current U.S. regulatory framework is ill-equipped to deal with cryptocurrency and other digital assets, and Congress has been awash in potential cryptocurrency bills of all kinds. Although any major regulatory overhaul is unlikely in an election year, there are promising signs that legislation may soon provide certainty, at least in one specific arena in significant need of reform—stablecoins.

The Financial Stability Oversight Council and the President's Working Group on financial markets have identified the need for stablecoin legislation to close a regulatory gap, a course of action supported by both Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen. The existence of such a gap was further illustrated by the District of D.C.'s decision in June that BUSD, a Binance-offered stablecoin redeemable on a one-to-one basis for U.S.