The much-anticipated legislation on stablecoins has hit a significant roadblock in the United States. The question on everyone’s lips is – who is to blame for this legislative stalemate? Is it the White House or House Financial Services Committee Chair Patrick McHenry?
McHenry vs. White House: Crypto Bill Progress Amidst Stablecoin Stalemate
A bipartisan agreement on stablecoin legislation has eluded the House lawmakers, with Patrick McHenry (R-N.C.), the Chair of the Financial Services Committee, attributing the deadlock to the White House’s obstinacy. However, the committee’s leading Democrat countered this claim, suggesting that it was McHenry himself who brought the discussions to a halt.
McHenry expressed his disappointment as he revealed that he had intended to announce a consensus on stablecoin legislation with the committee’s senior Democrat, Maxine Waters (D-Calif.). However, due to what he described as the White House’s refusal to compromise, the negotiations had once again come to a standstill. While McHenry conveyed his dissatisfaction, he did not dive into the specifics of the disagreement with the executive branch.
He stated that a bipartisan agreement was almost achieved, noting that after 15 months of discussions, which were disrupted by midterm elections, a shift in majority control in the U.S. House of Representatives, and the fallout from the FTX collapse that rippled through the digital asset industry, they were nearer to a resolution than ever before.
Waters Criticizes McHenry and Raises Concerns Over Current Bill
The stablecoin initiative was initially perceived to have a higher chance of bipartisan approval than the crypto market structure bill passed on Wednesday, which nevertheless secured the endorsement of the committee with six Democrats and all Republicans. However, the stagnation in discussions may have dampened this prospect.
Waters vehemently criticized the stablecoin bill under review on Thursday, accusing McHenry of being “impatient” and labeling the current draft of the bill as “deeply problematic and bad for America.” Her criticism stemmed from a clause in the bill that permits state regulators to greenlight stablecoin issuances without the Federal Reserve’s involvement.
Furthermore, she expressed apprehension that the existing version of the bill, if enacted, could enable corporations like Amazon and Facebook to launch their own digital currencies.
Waters said, “The Fed does not support the bill, Treasury does not support the bill, and we do not have the support of those who asked us to get involved with stablecoins.”
The Republicans’ stablecoin bill faced intense scrutiny during Thursday’s markup, with Republicans advocating for its progression and Democrats expressing reservations at every procedural juncture.
Given that such legislation would likely require bipartisan backing to progress in the Senate, the committee’s attempt to openly negotiate the specifics of the bill highlights the persistent deadlock concerning U.S. stablecoin regulation.