With the upcoming election season approaching, discussions among lawmakers have stalled for months, making passage of legislation in Washington nearly impossible.
Nonetheless, lawmakers who worked on drafting the stablecoin bill expressed optimism about legislative progress in both the House and Senate. However, the stablecoin bill, which was considered relatively achievable compared to other cryptocurrency-related bills, ran into obstacles due to insufficient time to get a vote.
A stablecoin bill led by House Financial Services Committee Chairman Patrick McHenry, R-N.C., passed out of committee last summer. But it faced bipartisan debate, with Republican lawmakers taking a stand against the White House. In particular, Rep. Maxine Waters, the top Democratic member of California, called the bill “seriously problematic,” citing a provision allowing state regulators to approve stablecoin issuance without intervention from the Federal Reserve. “He criticized.
Although Waters and McHenry’s interactions have increased since then, disagreements persist regarding the stablecoin issuer’s primary regulator.
McHenry mentioned an “actionable framework” for progress at Coinbase’s Update the System Summit on Wednesday. He emphasized the need for legislative instruments and deadlines to effectively address unresolved issues.
Cody Carbone, vice president of policy at the Digital Chamber, noted ongoing dialogue between McHenry and Waters’ teams but emphasized minimal progress on substantive issues.
As for the bill’s prospects in the House, Carbone suggested it has a 50% chance of passage, but only a 5% chance of becoming law due to various complexities.
Uncertainty also looms in the Senate, where Sens. Kirsten Gillibrand (D-N.Y.) and Cynthia Lummis (R-Wyo.) aim to unveil stablecoin legislation focused on regulatory clarity and consumer protection. However, discussions are being hampered by uncertainty about the bill’s details and completion strategy.
Lummis expressed optimism about the bipartisan effort, citing Senate Majority Leader Chuck Schumer’s openness to considering such legislation. She expects stablecoins to develop in 2024.
Despite the challenges, stakeholders are encouraged by legislative efforts in both houses and expressed optimism that an agreement can be reached before the end of the year.
However, obstacles remain that could potentially hinder the progress of stablecoin legislation as the Senate Banking Committee prioritizes other issues. Efforts to package legislation, such as a potential compromise between stablecoins and a marijuana banking bill, offer glimmers of hope, but they still face challenges navigating the gridlock in the House.
Ultimately, lawmakers aim to get into the next Congress emphasizing the importance of moving forward with stablecoin legislation despite a possible delay beyond the end of the year.
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