Representative Patrick McHenry, the House Financial Services Committee Chair, reemphasized his commitment to stablecoin regulation in a recent Zoom meeting organized by stablecoin issuer Circle. Despite the imminent threat of a government shutdown, McHenry told a New York-based audience that he’s determined to bring the stablecoin issue to the President’s desk. Stablecoins, digital assets tethered to the value of a sovereign currency like the U.S. dollar, have seen an uptick in popularity. Although states such as New York have their regulatory frameworks in place for issuing these digital currencies, federal rules remain an ongoing discussion point on Capitol Hill.
Moreover, the timing couldn’t be more pressing. The threat of a government shutdown looms large. Failing to reach a funding agreement could halt many federal operations as early as Saturday. McHenry’s affirmation of stablecoin legislation adds to the fervor of this high-stakes scenario. His committee has already produced two major bills on digital assets this year, with the other addressing market structure and oversight from regulatory bodies like the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).
Bipartisan dialogues could expedite progress
McHenry isn’t sailing these waters alone. He revealed he’s had productive conversations with well-informed senators from both political parties. Though the pace of legislative progress is often sluggish, these discussions could accelerate the process. However, the bill must clear multiple hurdles before becoming law. After passage in the Republican-led House, it will move to a Democrat-controlled Senate. Following that, it needs the President’s signature.
Aside from the utility of stablecoins in facilitating payments, McHenry touted the broader implications for the U.S. dollar. Dollar-denominated stablecoins could proliferate the use of the greenback globally. McHenry described these digital assets, backed one-to-one by cash reserves, as “a very simple product.”
Additionally, McHenry touched upon the tension between state and federal regulatory roles. While states aren’t idly waiting for federal direction—with 17 stablecoin bills currently pending in state legislatures—he suggested that the larger issue extends beyond digital assets. The ongoing debate could shape lawmakers’ attitudes toward innovation and individual rights.
While the precise route to federal stablecoin legislation remains uncertain, McHenry’s renewed commitment to the issue adds a sense of urgency. Amid challenging times, it appears that stablecoin regulation remains a priority, unaffected by potential gridlocks that could stymie broader governmental functions.
