Committee discusses state stablecoin framework, carries HB259 over for more work
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Summary
Committee members discussed HB259, a bill to create a state licensing and regulatory framework for stablecoins tied to the federal 'Genius Act.' Members raised concerns about state use of stablecoins, consumer acceptance, transaction fees and implementation; the bill was carried over for further study and possible amendment.
Chair turned consideration of HB259 to the sponsor and the committee decided to carry the bill over for further work after extensive discussion.
The sponsor (identified in the hearing as Representative Sorrow) said HB259 is designed to implement a state regulatory framework for payment stablecoins consistent with the federal "Genius Act," requiring licensure, dollar‑for‑dollar backing and anti‑fraud and know‑your‑customer protections. "It basically says they have to be licensed, talks about all the regulations they have to follow, ties it with the, the Genius Act," the sponsor said, adding that the bill "is very thorough in how things are regulated."
Agency and industry representatives briefed the committee that the proposal follows a Conference of State Bank Supervisors model rule and would intersect with existing money‑transmitter enforcement handled by the securities commission. A securities commission representative noted the Office of the Comptroller of the Currency (OCC) will provide more detailed federal rules and that a state program would need OCC certification, meaning a full rollout would take time.
Vice Chair Witt raised concerns about whether the state should adopt or use a stablecoin at all, calling it an "investment" and questioning the wisdom of state involvement. The sponsor replied the bill does not require the state to issue or use stablecoins, but rather enables licensure for issuers and provides oversight. "We're in no way requiring [state agencies] to use stablecoins," the sponsor said. The committee also discussed potential transaction fees, competition with existing electronic payment costs, consumer acceptance and the need for training and additional study.
Members suggested using or convening the existing blockchain study commission to examine technical and policy questions; the sponsor and several members supported another meeting or a study resolution to refine the bill. The chair said HB259 would be carried over to allow time for late amendments and follow‑up with finance and other departments.
The committee adjourned with HB259 left open for further committee work.