The US House of Representatives has hit a roadblock in its efforts to create a comprehensive framework for payment stablecoins. The negotiations have stalled, with Republicans blaming the White House for the impasse. House Financial Services Chair Patrick McHenry announced that progress had stalled due to opposition from the White House. Despite the bipartisan efforts, the White House’s alleged unwillingness to compromise has brought the negotiations to a halt.
The controversy surrounding the stablecoin bill
The stablecoin bill, which was up for consideration, has been criticized by both parties. McHenry was accused of being “impatient” by his Democratic counterpart, Rep. Maxine Waters, who called the current version of the bill “deeply problematic and bad for America.” The bill, as it stands, allows state regulators to approve stablecoin issuances without Federal Reserve input. This provision has raised concerns that companies like Amazon and Facebook could issue their own digital currencies if the bill became law.
Waters requested that Republicans remove the extremist bill from the markup and refrain from engaging in culture wars. She pointed out the absence of Federal Reserve oversight and the lack of diversity and inclusion provisions.
It is important to know that the news came just after lawmakers focused on finance advanced three bills regarding crypto issues to be voted on in the full House of Representatives. This is the first time they have proposed laws solely dedicated to this topic.
The stalled negotiations have soured the possibility of gaining more bipartisan support for the stablecoin effort. Also, the committee had previously approved a crypto market structure bill with six Democrats and all Republicans. However, the failure to reach an agreement on the stablecoin legislation has cast a shadow over the committee’s efforts to advance laws dedicated to the topic.
However, the Federal Reserve and the Treasury Department do not support the bill as it stands, according to Waters. Banks have also raised similar concerns in correspondence to the committee. Despite these criticisms, McHenry has strongly pushed back, indicating a deep divide in opinions on the stablecoin legislation.
The future of stablecoin legislation in the US
Despite the current impasse, the efforts to create a comprehensive framework for payment stablecoins in the US are not over. McHenry has expressed his disappointment but remains hopeful for a future agreement. The stalled negotiations represent a significant setback but highlight the complexities and challenges in regulating the crypto industry. As the debate continues, the future of stablecoin legislation in the US remains uncertain.
