US Stablecoin Bill: Law Decoded Update

United States Treasury Secretary Janet Yellen has emphasized the need for Congress to address the gaps in regulation surrounding digital assets. During a hearing on the Financial Stability Oversight Council annual report, Yellen discussed the importance of regulation in protecting investors and overseeing stablecoin issuers. Representative Patrick McHenry, Chair of the House Financial Services Committee, raised questions about pending legislation related to stablecoins and regulatory clarity in the crypto space. In response, Yellen emphasized the critical role of regulation in certain areas and expressed the need for Congress to take action.

Representative Maxine Waters announced that Democrats and Republicans are making progress in reaching a joint vision for stablecoin regulation. She has been negotiating with McHenry for over 20 months on this matter. The focus of the debate has centered around how the Federal Reserve would oversee the stablecoin market and whether it would establish rules for stablecoin issuance. Jeremy Allaire, CEO of Circle, a company behind the stablecoin USD Coin, remains optimistic that the United States will pass stablecoin legislation in 2024. Circle has been actively lobbying for stablecoin regulation, having spent around $760,000 on lobbying efforts since late 2021.

In South Korea, the government has introduced new regulations under the Virtual Asset Users Protection Act to safeguard investors from market crimes in the cryptocurrency space. The legislation prohibits the use of undisclosed important information, market manipulation, and illegal trading. Violations of these regulations can result in fixed-term imprisonment or fines several times the amount of illegal profits. In cases where criminals make over 5 billion won ($3.8 million) through illegal crypto trading schemes, life sentences may be imposed.

Moving to Europe, the European Commission is taking steps to protect upcoming European elections from misinformation by requiring tech platforms like TikTok, X, and Facebook to detect AI-generated content. The commission has initiated a public consultation on proposed election security guidelines for large online platforms and search engines. The aim is to address the potential threats posed by generative AI and deepfakes. The draft guidelines provide measures to mitigate election-related risks, such as specific actions concerning generative AI content and clear guidance for European Parliament elections.

Kenya is seeing public backlash over the proposed 2023 Robotics and Artificial Intelligence Society Bill. IT professionals in the country are urging the parliament to reject the bill, citing numerous shortcomings. During a session held by the National Assembly’s Communication, Information, and Innovation Committee, stakeholders in the AI and robotics fields expressed their concerns about not being involved in the bill drafting process. The legislation aims to impose penalties on unlicensed entities involved in robotic and AI businesses if they fail to register with the Robotics Society of Kenya, including fines and potential prison sentences.