Proposed stablecoin legislation is facing obstacles in being added to the must-pass Federal Aviation Administration’s reauthorization bill. Despite efforts by Representatives Maxine Waters and Patrick McHenry to combine stablecoin regulations with the FAA bill, leaders in the Senate and House of Representatives are not inclined to include stablecoin legislation in the FAA legislation. Lawmakers typically attach less popular bills to larger, more certain-to-pass bills in order to gain bipartisan support. The push to merge stablecoin legislation with the FAA bill has hit a roadblock, reducing the likelihood of stablecoin regulations being passed.
Patrick McHenry’s “Clarity for Payment Stablecoins Act,” introduced in 2023, proposes to regulate stablecoins similarly to the traditional financial sector. This bill is not the only stablecoin policy being considered in Washington D.C. Senators Cyntia Lummis and Kirsten Gillibrand have introduced the Lummis-Gillibrand Payment Stablecoin Act, which would allow federal and state depository institutions to issue stablecoins. Non-depository institutions would be overseen by the federal government while still preserving state-level regulation. The bipartisan Lummis-Gillibrand Payment Stablecoin Act includes provisions such as mandating one-to-one reserves for stablecoin issuers and prohibiting algorithmic stablecoins.
Senator Elizabeth Warren has shown particular concern about anti-money laundering issues related to stablecoins. She has proposed the Digital Assets Anti-Money Laundering Act (DAAMLA) in response to these concerns and has garnered bipartisan support for it. Warren emphasizes the need for a regulatory framework to address anti-money laundering concerns in the context of the increasing use of stablecoins. Reports indicate that Congress is facing challenges in advancing stablecoin legislation, and the decision to not include crypto legislation in the FAA bill may hinder the chances of stablecoin regulations being approved.
Efforts by Representatives Maxine Waters and Patrick McHenry to push for the inclusion of stablecoin regulations in the FAA bill have faced resistance from congressional leaders. The strategy of attaching stablecoin legislation to the FAA reauthorization bill, which is considered a must-pass bill, has been met with skepticism. While there are multiple proposed bills related to stablecoin regulation, the uncertain future of stablecoin legislation in Congress raises concerns about the regulatory framework for stablecoins in the U.S. The decision to not combine stablecoin regulations with the FAA bill could impact the progress and approval of stablecoin legislation in the future.
The push for stablecoin regulation in Congress has faced delays and obstacles, with the possibility of stablecoin legislation not being added to the FAA reauthorization bill. The efforts by lawmakers such as Patrick McHenry, Maxine Waters, Cyntia Lummis, Kirsten Gillibrand, and Elizabeth Warren to address stablecoin regulations reflect the growing importance of crypto assets in the financial sector. However, the challenges in advancing stablecoin legislation underscore the complexities and uncertainties surrounding the regulatory environment for stablecoins in the U.S. The decision to keep stablecoin legislation separate from the FAA bill highlights the difficulties in achieving consensus on this issue among lawmakers and stakeholders.
