News

By Hannah Lang

(Reuters) - New York Attorney General Letitia James urged lawmakers on Thursday to pass legislation to create a federal regulatory framework for cryptocurrencies, arguing that digital asset investors urgently need stronger protections.

In a letter to top congressional leadership, including Senate Majority Leader John Thune and U.S. House Speaker Mike Johnson, James said that lawmakers should require crypto companies to register with a federal regulatory agency and set minimum listing standards for crypto tokens.

WHY IT’S IMPORTANT

James' letter comes as Congress appears likely to pass a bill creating stablecoin rules for the first time. Stablecoins, a type of cryptocurrency designed to maintain a constant value, usually a 1:1 dollar peg, are commonly used by crypto traders to move funds between other crypto tokens like bitcoin and ether.

In her letter, James said that lawmakers should require stablecoin issuers to have a U.S. presence, and to deposit U.S. Treasuries and other cash equivalents in American banks.

CONTEXT

The digital asset industry has seen growing influence in Washington after spending more than $119 million backing pro-crypto congressional candidates in last year's elections.

President Donald Trump has sought to broadly overhaul U.S. cryptocurrency policies after courting cash from the sector during his presidential campaign.

Bo Hines, who leads Trump's Council of Advisers on Digital Assets, said last month that the White House wants a stablecoin bill passed before August.

KEY QUOTE

“Countless New Yorkers invest in cryptocurrency and digital assets, and more must be done to protect them and their money,” said James. “Thousands of investors in New York and across the country have lost millions of dollars to cryptocurrency scams and fraud that could be prevented with stronger federal regulations."