French Hill discusses Ether ETF, payments stablecoin bill 

In an interview Monday, U.S. Rep. French Hill highlighted regulatory efforts that would enable the private sector to lead the development of a dollar-backed payment stablecoin and predicted that spot Ethereum ETFs would enter the market faster compared to Bitcoin ETFs.

U.S. Rep. French Hill, chairman of the digital assets subcommittee, discussed future stablecoin-related policy in the United States during a CNBC “Squawkbox” interview.

“We are currently working on a payment stablecoin bill that would allow the private sector to lead the way in a dollar-backed payment stablecoin,” Hill said.

Hill stated that efforts are continuing to develop the bill that will enable the private sector to take the lead in creating a dollar-backed payment stablecoin. This initiative highlights the focus on leveraging private sector talent to develop stablecoin technology in the financial sector.

In August 2023, PayPal introduced its new cryptocurrency PayPal USD (PYUSD) as a stablecoin backed by safe and highly liquid assets.

“I think the concept of tokenized payments via payment stablecoin makes sense in some applications on blockchain,” Hill said.

Hill said last week’s latest legislative move comes as an effort to ensure clarity of stablecoin regulations and consumer protection in the stablecoin market.

Benefits and risks of stablecoin

In the past, one response to crypto volatility has been provided through stablecoins, which are cryptocurrencies that aim to hold a constant value relative to a specific asset or pool of assets, such as the US dollar.

A stablecoin held in bank accounts will safely expand and increase the money supply of any currency. A stablecoin pegged to the US dollar could boost economic growth by making the dollar used more efficiently, making transactions faster and cheaper.

Potential economic risks associated with stablecoins include legal issues, governance concerns, operational flexibility, money laundering, terrorist financing, consumer protection, and impact on monetary policy and financial stability.

Spot Ethereum ETF

Representative Hill also predicted that spot Ethereum ETFs will reach the market faster than Bitcoin (BTC) ETFs in early 2024.

Hill stated that the cash and futures market correlation “increases the valuation of Ether and puts it on a slightly shorter time frame than we have seen in the Bitcoin period.”