Stablecoin Issuers Incur Millions in Lobbying for Crypto Legislation
Recent scrutiny of stablecoin issuers’ operations reveals that Circle and Tether have actively engaged lobbyists on possible crypto regulation agendas. The two firms have spent hundreds of thousands of dollars in an attempt to lobby lawmakers since the onset of 2022.
Millions Spent to Fund Lobbying Activities
Incurring the high expenditure was inspired by the need to place crypto legislation on the agenda. A scrutiny of the stablecoin issuers’ transactions shows hundreds of thousands of dollars in expenditure to influence crypto legislation’s return into the lawmaker’s agenda.
The industry leaders in stablecoin issuance, Tether, and Circle, incurred over a million dollars, as revealed by ProPublica’s collation of filings.
Tether, known for issuing the top-ranked USDT stablecoin, admitted paying a quarterly fee of $ 120000 to the FTI Government Affairs. ProPublica approximated the total outflow incurred in 2022 as $600000.
Tether considers the payment an obligation to fulfill as a responsible participant within the industry. As such, Tether considers it essential to have input toward developing a transparent regulatory framework. Such should balance safeguarding consumers’ funds, market integrity, and fostering an innovation culture.
Circle Acknowledges Responsibility to Fund Lobbying
The report indicates that Circle has quarterly spending of $100000. The USDC issuer acknowledges allocating $100000 to Washington DC-based Invariant to facilitate the awareness campaigns for the Capitol Hill policymakers regarding stablecoin and crypto regulation.
In addition, Circle admitted that a portion of the spending aimed to fund the monitoring of various proposals. The firm confessed to spending over $560,000 since engaging the strategic consulting in 2021.
Stablecoins Agenda in Regulation
Stablecoin constitutes a critical element in two rival draft bills fronted by Democrats and Republicans. Although proposed by rival groups, both seek to permit banks and non-banks with authority to issue stablecoins. The draft, sponsored by Patrick McHenry of North Carolina, seeks to grant additional power to the individual States.
The two bills were introduced on Thursday, where the speakers acknowledged the need to formulate a comprehensive framework.
The chair of the Digital Assets, Financial Technology, and Inclusion Subcommittee, French Hill, confirmed the tabling of two legislative proposals. The Aransas Congressman indicated that there’s a willingness among the lawmakers, thus ruling out unawareness. He revealed that delivering the requisite regulation would cement the US as a powerhouse, a safe haven for payments innovation.
The stablecoin issues have attracted other firms into lobbying. Recently, Flexa Network engaged Key Bridge Advisors to lobby on behalf of the payments providers. Engaging the blockchain specialist signifies futurist thinking on stablecoin bills.
Binance Establishes Own Lobbying Network
Binance also admitted leveraging its lobbying network tasked with a similar mandate on the hill. The move by Binance is unsurprising, given that its stablecoin partner Paxos set a February deadline to halt minting the dollar-pegged token in February.
Binance is set to bear the burden of allocating resources toward lobbying following Paxo’s departure. In its explanation, Paxos indicated that the enforcement action undertaken by regulators triggered the decision to halt minting. In particular, the New York Department of Financial Services (NYDFS) directed Paxos to terminate further minting.
Nevertheless, Paxos confirmed spending two $150,000 bills from two firms it engaged for crypto-related lobbying in the first quarter of 2023. However, the disclosures hardly single out engaging it for stablecoin legislation.
