- U.S. House lawmakers take a significant step in advancing stablecoin legislation despite lack of bipartisan support, leading to a stalemate attributed to White House objections.
- The bill represents a milestone achievement in Congress. Contentious debates marked the markup of the stablecoin bill.
On Thursday, U.S. House lawmakers took a significant step in advancing stablecoin legislation through Congress. However, the House Financial Services Committee pushed the bill forward for a potential floor vote without receiving bipartisan support. Chair Patrick McHenry (R-N.C.) attributed the lack of bipartisan backing to objections from the White House, leading to a stalemate.
#BREAKING: Chairman @PatrickMcHenry's Clarity for Payment Stablecoins Act passes the Financial Services Committee with BIPARTISAN support.
After fifteen months of bipartisan collaboration, this landmark legislation is one step closer to becoming law. pic.twitter.com/vCiyqjyAAf
— Financial Services GOP (@FinancialCmte) July 28, 2023
Milestone Achievement: Stablecoin Legislation Secures House Approval
During a heated hearing on Thursday, the panel’s leading Democrat, Maxine Waters (D-Calif.), accused McHenry of prematurely ending the negotiations after they broke down the night before the hearing.
Despite the controversy, the legislation secured a 34-16 vote, allowing it to proceed for further consideration in the House of Representatives. Although the political battle surrounding it has marred this development, it represents a significant milestone in stablecoin progress in Congress.
During the hearing’s beginning, McHenry expressed his disappointment, stating,
“Today I had hoped to announce an agreement with the ranking member on stablecoins legislation. Unfortunately, this will not be the case … It was the White House’s unwillingness to compromise that has once again brought that negotiation to a halt.”
The news comes one day after lawmakers focused on finance advanced three crypto-related bills for a vote in the full House of Representatives, marking the first time laws solely dedicated to this topic moved forward. Additionally, the House Agriculture Committee also approved a crypto markets oversight bill that had previously passed McHenry’s panel.
McHenry expressed his disappointment with the outcome of the stablecoins work, which involved negotiations spanning 15 months. However, he refrained from providing specific details about the latest disagreement with the executive branch.
Any stablecoin bill in the U.S. would also need support in the Democrat-led Senate. Thus, a bill originating solely from House Republicans rather than a bipartisan effort might have a reduced likelihood of influencing the Senate. McHenry’s decision to advance the bill despite strong objections from committee Democrats may appease fellow Republicans, but it could also diminish its chances of becoming law.
Contentious Markup of the Stablecoin Bill
Last week, McHenry introduced the Clarity for Payment Stablecoins Act, marking the latest addition to a series of stablecoin legislation drafts he has actively engaged in since last year. The bill aims to establish a regulatory framework for cryptocurrencies tied to fiat currency’s value. Stablecoins play a crucial role in the crypto markets, offering a stable asset that investors can use to trade in and out of more volatile assets.
During the markup of the Republicans’ stablecoin bill on Thursday, the atmosphere was highly contentious, with Republicans pushing ahead while Democrats raised objections and slowed progress on every procedural aspect. The committee’s attempts to openly negotiate the bill’s details highlight the ongoing deadlock regarding U.S. stablecoin oversight.
A White House spokesperson did not provide an immediate comment on the matter. Waters mentioned that the Federal Reserve and the U.S. Treasury Department do not support the bill in its current form.
During the debate, Stephen Lynch (D-Mass.) suggested postponing the vote until September, arguing that Democrats had not received sufficient opportunities to present their ideas. Waters supported this request, suggesting that McHenry should consider working on the bill during the August recess of Congress and resume discussions after the break.
On Thursday, the committee discussed various other bills, including one presented by Rep. Warren Davidson (R-Ohio) to safeguard individuals’ capacity to maintain self-custodied wallets for their cryptocurrency assets. While some Democrats contended that the bill could facilitate illicit activities and enable people to conceal assets from government oversight, the panel voted 29-21 to approve it.