Bitwise Chief Compliance Officer Says Stablecoin Legislation Could Come This Year

Stablecoins may be the first piece of crypto-related legislation that Congress will tackle this term, Katherine Dowling, chief compliance officer at crypto investment manager Bitwise, said Monday, in part because it is "narrower issue."

“It’s something you can get your arms around a little bit better than the larger meteor issue of general crypto market structure,” Dowling said on CoinDesk TV’s “First Mover.”

She said the crypto industry lost momentum following the collapse of crypto exchange FTX, but it may finally be at a place where it can rebuild its stamina.

Overall, if legislation is passed, it could be a “big positive” for the industry, Dowling said.

“Having some clear rules of the road and rebuilding trust is going to be imperative,” Dowling said. She said stablecoin issuers may have to have "one-to-one" backing for their coins and no leverage. Legislation may help the U.S. as it looks to keep up with other countries and could even set a regulatory standard, she said.

“If we start with our regulatory foundations, we can then increase the dialogue so that we make sure that on a global level, everyone's part of the conversation,” she said.

If rules of the road aren't implemented in the U.S., it will push businesses and innovators offshore, she said.

“Regardless of whether you are pro or con on crypto … there's a sense among a number of members of Congress that something must be done,” she said.

Read more: US House Republicans to Set Up Crypto Committee to Oversee Shaky Industry: Report