House Financial Services Committee representatives Maxine Waters and Patrick McHenry met with Senate Majority Leader Chuck Schumer to discuss their stablecoin bill proposal. They are considering linking stablecoin reform to the funding reauthorization of the FAA in order to secure bipartisan support. This strategy would be unprecedented in financial services policy and shows a concerted effort to push for stablecoin regulations in the U.S.
Patrick McHenry has been a vocal advocate for stablecoin reform and has already drafted the “Clarity for Payment Stablecoins Act” in 2023. This bill aims to subject stablecoins to regulatory oversight similar to traditional financial institutions. Additionally, Senators Kirsten Gillibrand and Cynthia Lummis are planning to introduce their own 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 issue stablecoins, while non-depository institutions would be overseen by the federal government and regulated at the state level.
Despite the efforts to push for stablecoin regulations, some lawmakers, such as Senator Elizabeth Warren, have raised concerns about the potential risks associated with stablecoins and the need for strong anti-money laundering measures. Warren emphasized the importance of ensuring safety and soundness in integrating stablecoins into the formal banking system without proper regulations in place. She has been pushing for the “Digital Assets Anti-Money Laundering Act” since 2022 to address these concerns and prevent illicit activities from taking place within the cryptocurrency space.
The discussion around stablecoin regulation in the U.S. continues to evolve as lawmakers grapple with finding a balance between promoting innovation in the cryptocurrency sector and mitigating risks associated with stablecoins. The finalized version of the stablecoin bill proposed by Maxine Waters and Patrick McHenry is still in development, but it is expected to be presented to Congress soon. The potential inclusion of stablecoin reform in the FAA reauthorization funding demonstrates a bipartisan effort to address the challenges posed by stablecoins and ensure a regulated environment for the cryptocurrency industry.
