Bill Description: House Bill 586 would create a regulatory structure for stablecoins and allow for coordination with other states and the federal government regarding their use.
Rating: -3
Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market?
House Bill 586 would create Chapter 83, Title 67, Idaho Code, to define and govern stablecoins in Idaho. The bill relies heavily on federal definitions under the “U.S. stablecoins act (GENIUS act), P.L. 119-27,” which “establishes a comprehensive federal framework governing payment stablecoins, including issuer qualification, reserve standards, consumer protections, and enforcement.”
The bill says, “States are authorized under the GENIUS act to recognize and use permitted payment stablecoin issuers and to adopt substantially similar frameworks for oversight of state-level usage.”
The bill says “the state treasurer and the state controller, acting jointly,” will present a list of “authorized payment stablecoins” to the Legislature, which may then “suspend or revoke the authorization of any payment stablecoin by adopting a concurrent resolution or through the enactment of a law amending or superseding a list of stablecoins that have been authorized.”
By authorizing specific stablecoins for state use (particularly those tied to federal qualifications under the GENIUS act), the government is inserting itself into the free-market development of digital currencies. This could stifle true innovation by favoring heavily regulated, U.S.-centric issuers (requiring U.S. incorporation, citizen founders/shareholders, and reserves in U.S. banks), potentially crowding out decentralized or international alternatives that better align with voluntary exchange.
(-1)
Does it violate the spirit or the letter of either the United States Constitution or the Idaho Constitution? Examples include restrictions on speech, public assembly, the press, privacy, private property, or firearms. Conversely, does it restore or uphold the protections guaranteed in the US Constitution or the Idaho Constitution?
Among the issues with how House Bill 586 inserts government into matters that properly belong within the free market, the bill would create the potential for a loss of privacy and misuse of data.
Even with privately issued stablecoins, the blockchain's inherent transparency, combined with government-mandated qualifications (e.g., quarterly audits, monthly reserve reports), might enable easier tracking of transactions. If vendors elect stablecoin payments, this could normalize digital ledgers that link to identities, creating a surveillance infrastructure where the state (or federal overseers) gains visibility into private economic activities, especially through required disclosures and compliance procedures.
Moreover, the required annual reports to the legislature (including transaction volumes and cost savings) and the establishment of procedures for risk assessment and safeguards could involve collecting detailed financial data, potentially creating new avenues for government surveillance or data retention. This is unnecessary bureaucracy that compiles information vulnerable to misuse, hacking, or subpoena for surveillance purposes.
(-1)
Does it violate the principles of federalism by increasing federal authority, yielding to federal blandishments, or incorporating changeable federal laws into Idaho statutes or rules? Examples include citing federal code without noting as it is written on a certain date, using state resources to enforce federal law, and refusing to support and uphold the tenth amendment. Conversely, does it restore or uphold the principles of federalism?
In addition to its basis in the federal GENIUS act and incorporation of federal references and definitions, House Bill 586 says, “The state treasurer and the state controller, acting jointly, are authorized to enter into memoranda of understanding, cooperative agreements, or information-sharing arrangements with other states and with federal agencies for the evaluation, integration, or utilization of public purpose-qualified stablecoins.”
Such agreements could compromise state sovereignty and compound the privacy concerns discussed above.
(-1)
