The Digital Chamber urges US lawmakers to pass stablecoin legislation immediately as usage grows

Blockchain advocacy group The Digital Chamber called for "immediate action" from U.S. lawmakers to get a stablecoin bill passed as its use progresses.

In a report titled, "How Stablecoins are Extending U.S. Dollar Dominance," released on Tuesday morning, the group detailed stablecoins' usage and pushed for a stablecoin bill to be passed quickly to keep up with its increased use. Stablecoins are increasingly being used for savings and payments across borders, according to the report. 

The Digital Chamber also plans to meet with the Federal Reserve, the Office of the Comptroller of the Currency and House Financial Services and Senate Banking committees' leadership this week. 

"We really think the moment is now — that legislation needs to move," said Cody Carbone, president of The Digital Chamber in an interview with The Block. "We think we've very close, and this is low-hanging fruit." 

Over 98% of stablecoins in circulation globally are pegged to the U.S. dollar, according to the report, citing figures from Castle Island Ventures. Carbone said he hoped the report would be a motivation for lawmakers and pointed to other countries that are looking to bolster their use of stablecoins, including China or Russia. 

"We need to act now to ensure that the U.S. dollar can stay dominant," Carbone added.

The report examines three bills — two from the Senate and one in the House. Work has been underway in the House by both House Financial Services Committee Chair, and soon to retire, Patrick McHenry and top Democrat Maxine Waters. However, they hit a snag over a provision a provision that allows state regulators to approve stablecoin issuances without Federal Reserve input.

On the Senate side, Sen. Bill Hagerty, R-Tenn., introduced draft legislation in October for a bill that closely resembles work being done in the House. Sens. Cynthia Lummis, R-Wyo., and Kirsten Gillibrand, D-N.Y. introduced a stablecoin bill in April. 

The Digital Chamber included a list of policy recommendations in the report, which also included insight from Castle Island Ventures partner Nic Carter and Digital Chamber members. The list included allowing both banks and non-banks to issue stablecoins, asserting that stablecoins should not be treated as securities, requiring a 1:1 backing, among other requests. 

But when?

Carbone said he expects stablecoin legislation to be on President-elect Donald Trump's desk in 2025. 

"If you're the Trump administration coming in and you're looking to notch an early bipartisan win, this could be it," Carbone said. 

Other factors, including renewing the Tax Cuts and Jobs Act and budget reconciliation could delay passage, Carbone said. Republicans have said they would extend Trump's tax cuts through the reconciliation process if they were to take the majority in the election season, according to The Hill. So far the Senate has flipped Republican, but the House is still up in the air with Republicans leading. 

Budget reconciliation could take up a lot of space on the legislative calendar and make it difficult to pass stablecoin legislation, but not impossible, Carbone said. 

"My guess is still, even with budget reconciliation, if House Republicans win, is still by Q2 2025, we have a stablecoin bill on Trump's desk," Carbone said.