Forward Guidance Newsletter Segment

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The Senate Banking Committee’s Digital Asset Subcommittee held its first hearing yesterday, with stablecoins taking center stage.

Cynthia Lummis, chair of the newly formed subcommittee, stated that stablecoin legislation is its top priority. A market structure bill, already showing movement from last session, will follow.

> “We’re on the precipice of finally creating a bipartisan legislative framework for both stablecoins and market structure,” she said.

Former CFTC Chair Timothy Massad, a witness during the hearing, advised lawmakers to focus on stablecoins first, saying market structure legislation should be postponed until fundamental questions are answered.

> “Market structure regulation requires resolving some complex regulatory boundaries, including when is a digital asset a security, a commodity, both or neither?” he said. “There is a risk that we will significantly undermine the securities law framework that has served this country so well and has made our securities markets the envy of the world.”

These comments arise as the industry speculates on what a stablecoin bill might entail. Lummis’ GENIUS Act, introduced alongside Democratic Senator Kirsten Gillibrand, stipulates that “payment stablecoins” must come from registered issuers with 1:1 backing from fiat currency “or other secure reserves.”