 | Get all the essential market news and expert opinions in one place with our daily newsletter. Receive a comprehensive recap of the day's top stories directly to your inbox. Sign up here! |
(Kitco News) - The House Financial Services Committee passed the contentious Clarity for Payment Stablecoins Act on Thursday, advancing the comprehensive regulatory framework for stablecoins in the U.S. to a potential floor vote in the House.
Much like the advancement of the Financial Innovation and Technology for the 21st Century Act (FIT for the 21st Century Act) and the Blockchain Regulatory Certainty Act on Wednesday, the 34-16 vote to advance the stablecoin bill was split largely along party lines, with all of the Republicans on the Committee and three Democrats casting the votes needed to move the bill to the next stage of review.
The lack of broad bipartisan support was evident before the hearing began, as noted by House Financial Services Committee Chair Patrick McHenry (R-NC), who pointed the blame directly at the White House during his opening remarks.
“Today I had hoped to announce an agreement with the ranking member on stablecoins legislation,” McHenry said in prepared remarks. “That will not be the case… Unfortunately, there was a third party in this negotiation that did not share our same sense of urgency – the White House.”
“A bipartisan deal was within reach – we were closer than we’ve ever been,” he added. “A few small, but nonetheless important, provisions stood between us and a deal. It was the White House’s unwillingness to compromise that has once again brought negotiations to a halt.”
Despite objections from Democrats, McHenry said he has confidence the bill “accomplishes our shared goal – to provide a clear regulatory framework for the issuance of payment stablecoins,” and believes it deserves bipartisan support.
Rep. Maxine Waters (D-CA) pushed back against McHenry’s statements, saying it was actually McHenry who shut down the talks early after negotiations broke down the night before the hearing.
Waters called the bill “deeply problematic and bad for America,” saying it “promotes a race to the bottom by creating 58 different licenses.” She added that Democrats on the Committee were concerned about the reserve provisions in the bill, which would potentially allow issuers to include a wide range of assets in their reserves and permit large corporations like X, Meta, or Walmart to issue money.
The role of federal regulators in regard to stablecoin issuers was also a concern for Democrats on the Committee, especially the Federal Reserve's enforcement and supervisory power over issuers licensed by state agencies.
Waters said neither the Fed nor the U.S. Treasury Department supports the bill as it stands.
“I urge Republicans to pull this extremist piece of legislation from the markup,” she stressed. “Why the rush? Why can't we continue this negotiation?”
|
| Circle CEO says stablecoin bill is about USD dominance, wants Tether's USDT banned and criminalized |
Rep. Stephen Lynch (D-MA) called for the vote to be postponed until September. “We have had no meaningful opportunity to amend this bill ... that's an embarrassment,” he said. “We want to be heard, and we want to have input on this.”
Waters backed up that request, asking McHenry to consider working on it through the August recess of Congress and coming back to finish it after the break.
Despite these comments, the final vote was called, and the bill ultimately advanced out of the Committee. But the lack of bipartisan support means the legislation has an uphill battle ahead, as it must first be approved in a full House vote, and then be approved by the Democrat-controlled Senate.
Aside from the stablecoin bill, the House Financial Services Committee also passed the “Keep Your Coins Act of 2023,” a landmark bill advocating for the right to self-custody Bitcoin and other cryptocurrencies. The goal of the bill is to ensure that individuals and businesses can store and manage their own digital assets securely, without unnecessary third-party involvement.
