Stablecoin Bill Advances Amidst White House Opposition
U.S. Stablecoin Bill Takes Significant Step Despite Partisan Clash and White House Opposition
In a noteworthy development within the U.S. Congress, a long-awaited stablecoin bill made significant progress as it graduated from the House Financial Services Committee. However, the advancement of the Republican-backed bill was marred by a partisan clash and objections from the White House, leaving the committee chair, Patrick McHenry (R-N.C.), lamenting the missed opportunity for a bipartisan deal.
The Clarity for Payment Stablecoins Act, introduced by McHenry, represents a substantial stride in the regulation of stablecoins, garnering a 34-16 vote to clear the legislation for wider consideration in the House of Representatives. While the bill now moves closer to a floor vote in the House, it still faces challenges in the Senate and, ultimately, the requirement for presidential signature.
Thursday's hearing was marked by contentious debates, with the panel's top Democrat, Maxine Waters (D-Calif.), holding McHenry responsible for prematurely shutting down negotiations the night before the session. This disagreement soured what could have been a high-water mark for stablecoin progress in Congress.
McHenry expressed his disappointment at the outcome, as 15 months of negotiations culminated in a stalemate with the executive branch. The bill's provisions, which include granting state agencies greater licensing authority over payment stablecoin issuers while retaining federal oversight, sparked disagreements.
Waters, voicing strong opposition, described the bill as "deeply problematic and bad for America." She raised concerns about the reserve provisions and divergent views on the extent of federal regulatory control, especially concerning the Federal Reserve's enforcement and supervisory reach over state-licensed issuers.
The bill's future passage in the Democrat-led Senate remains uncertain, and the decision to move forward without bipartisan support could impact its chances of becoming law. Waters urged Republicans to withdraw the legislation from the markup to allow further negotiation, but the day ended with a 10 p.m. vote on the bill, leaving it one step closer to a House floor vote.
The Clarity for Payment Stablecoins Act aims to provide a regulatory framework for cryptocurrencies pegged to fiat currencies.
Stablecoins play a vital role in the crypto markets, offering investors a stable asset to trade amid the volatility of other digital assets.
During the combative markup, Republicans persisted in advancing the bill while Democrats raised procedural concerns, underscoring the ongoing stalemate in U.S. stablecoin oversight. Despite some Democrats, including Reps. Jim Himes (D-Conn.), Josh Gottheimer (D-N.J.), and Ritchie Torres (D-N.Y.), aligning with the Republican membership to approve the bill, the partisan tension remains palpable.
Amid the heated debates, the White House has yet to offer official commentary on the bill. Waters asserted that neither the Federal Reserve nor the U.S. Treasury Department currently support the bill in its present form.
As the stablecoin legislation advances further in Congress, the battle for regulatory clarity continues, and the fate of stablecoins in the United States hangs in the balance.
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