Republicans on the House Financial Services Committee are taking another swing at stablecoin legislation with a discussion draft revealed Monday afternoon, which may mark a new starting point for negotiations with Democrats.

The bill – the second legislative concept published in as many weeks – would create a definition of “payment stablecoins,” specifying what types of entities could issue them and define how these companies should handle reserves.

Unlike a previous version of the bill, which was published on the committee’s website ahead of a hearing on stablecoins last week, the new version leaves out algorithmic stablecoins, though it does repeat clauses stating that an issuer can either be a subsidiary of a federally insured depository institution or a state or federally regulated nonbank company.

The draft bill also makes clear that stablecoins must be fully backed by safe reserves that are subject to monthly reviews by registered accountants, which would eliminate the possibility of math-backed stablecoins being able to comply.

(by Nikhilesh De)