Leading U.S. lawmakers from the House Financial Services Committee, including Congresswoman Maxine Waters and Congressman Patrick McHenry, met with Senate Majority Leader Chuck Schumer to discuss their stablecoin bill proposal. The lawmakers are considering linking their stablecoin reform to the funding reauthorization of the Federal Aviation Administration (FAA) in an attempt to secure bipartisan support. This strategy would be fairly unprecedented in financial services policy and could potentially pave the way for the long-awaited stablecoin bill to move forward.
Patrick McHenry has been a vocal advocate for stablecoin reform and previously drafted the “Clarity for Payment Stablecoins Act” in 2023. If passed, his bill would subject stablecoins to regulatory oversight similar to that of the traditional finance sector. Additionally, Senators Kirsten Gillibrand and Cynthia Lummis are planning to unveil new stablecoin legislation that aims to weed out bad actors while promoting growth and innovation in the cryptocurrency landscape. The upcoming legislation would allow federal and state depository institutions to become stablecoin issuers, with non-depository institutions being overseen by the federal government but regulated at the state level.
Despite the momentum for stablecoin reform building on Capitol Hill, Senator Elizabeth Warren has raised concerns about the risks associated with such legislation. In a letter to McHenry and Waters, Warren highlighted the need for strong anti-money laundering measures in any stablecoin bill to ensure safety and soundness in the financial system. Warren, known for her anti-crypto stance, has been pushing for the “Digital Assets Anti-Money Laundering Act” since 2022, emphasizing the importance of regulatory frameworks to prevent illicit activities in the cryptocurrency space. She urges caution in integrating stablecoins into the formal banking system without stringent rules in place.
The discussion around stablecoin reform is gaining traction in Congress, with lawmakers facing pushback from those who are skeptical about the potential risks and implications of such legislation. As McHenry and Waters work on finalizing their stablecoin bill, it remains unclear when the proposal will be officially presented. However, the growing interest in stablecoin regulation and the bipartisan discussions taking place suggest that progress on this front may be forthcoming in the near future. Lawmakers are aiming to strike a balance between innovation and regulatory oversight to ensure the stability and security of the cryptocurrency ecosystem.
