Stablecoin bills, which are considered low-hanging fruit among other cryptocurrency bills, have hit a roadblock due to insufficient time for voting.
Talks between lawmakers have been on hold for months as election season approaches, making passage of legislation nearly impossible in Washington, Capitol Hill sources told The Block.
A stablecoin bill led by House Financial Services Committee Chairman Patrick McHenry, R-N.C., passed out of committee last summer. But congressional Republicans have become embroiled in a bipartisan debate, criticizing the White House for opposing the bill. Maxine Waters, the top Democratic member of California at the time, He said the bill was “seriously flawed.” supply This allows state regulators to approve stablecoin issuance without input from the Federal Reserve.
Since then, Waters and McHenry have met more frequently, but disagreements remain over who should be the primary regulator of stablecoin issuers.
McHenry said Wednesday at Coinbase’s System Update Summit that there is an “actionable framework.”
“We’re at a stage where we can see the airport, we can see where the plane is going to land, we can see how the plane is going to land, but we don’t know when it’s going to be able to land. It’s a plane.” McHenry said. “We need legislative vehicles, we need deadlines, and deadlines allow us to push for harder issues.”
He added that if the government is funded, the chances of stablecoin notes increasing. Waters did not respond to a request for comment.
Cody Carbon, The Digital Chamber’s Vice President of Policy confirmed: Waters and McHenry went from monthly meetings to almost weekly meetings, but “after talking to drafters on both sides of the aisle on the McHenry and Waters teams, we really haven’t gotten any closer,” he added. Carbone said the talks had progressed, but “we’re not any closer yet on some of these substantive issues.”
When asked how likely it was that the stablecoin bill would pass the full House of Representatives, Carbone said the chances could be up to 50%, but the odds of it becoming law are only 5%.
“There are a lot of dynamics at play,” Carbone said. “If we get a bipartisan House bill, and we reach a great agreement, a grand compromise, and it passes the House with 400 votes, it’s going to be very difficult for the Senate to ignore it.”
uncertainty in the senate
Reps. Kirsten Gillibrand (D-N.Y.) and Cynthia Lummis (R-Wyo.) plan to unveil stablecoin legislation they have been working on for months aimed at providing clarity on stablecoins and protecting consumers. no see.
A source familiar with the situation said the situation was frustrating because the content of the bill and the strategy for completing it were unclear.
A person familiar with the situation told The Block that discussions surrounding the bill had collapsed, but a spokesperson for Senator Loomis said this was not the case.
“That idea couldn’t be further from the truth,” the spokesperson said. “Providing regulatory clarity for stablecoins that enables continued innovation here in the United States is a top priority for both Senators Lummis and Senator Gillibrand, and our staff continues every day to negotiate legislation to achieve that goal. So we are holding a meeting.”
“The administration is willing to move forward with stablecoin legislation,” Senator Loomis said at a Coinbase event on Wednesday. “It’s the best way to move forward.” Lummis said there is a bipartisan effort, in part because Senate Majority Leader Chuck Schumer is willing to consider such legislation and Senators Gillibrand and Lummis remain in contact with their House counterparts.
“I am most optimistic about stablecoins in 2024,” Lummis said.
Some stakeholders are also encouraged by the efforts in both the Senate and House of Representatives on stablecoin legislation.
“There is a limited number of legislative measures remaining until the end of the year, but we are optimistic as all parties are clearly motivated to get this done,” said Ryan Eagan, deputy director of government affairs at the Crypto Council. innovation.
Elsewhere, the Senate Banking Committee is focused on other issues such as housing, and cryptocurrencies themselves are not considered one of Ohio Chairman Sherrod Brown’s priorities.
possible compromise
There have been reports over the past few months about some compromises and a potential bill package that could lead to final action, Ron Hammond said., Director of Government Relations, Blockchain Association. for example, Senate Democrats have been pushing a stablecoin bill and a marijuana banking bill called the Safe and Fair Enforcement Regulatory Banking Act, which would allow trading of interest. The bill allows financial institutions to serve the marijuana industry. Another bill in the mix could be the Recovery of Executive Compensation from Irresponsible Practices, called the RECOUP Act.
“Even if people don’t agree on everything, we’re hopeful that a package made up of each chair’s big priorities will be enough for people to be able to afford it. We’ll have a lot of membership before the summer starts and we get back into the election cycle,” Hammond said. .
Even if the Senate takes up the bill, the House would still face gridlock. Republicans secured a narrow majority of two votes after Colorado Rep. Ken Buck resigned immediately last week. If the Senate reaches a compromise on stablecoins and marijuana banking, the marijuana banking bill could have a hard time getting approval from House Speaker Mike Johnson (R-La.). Johnson has repeatedly opposed the bill, according to multiple news reports.
Ultimately, the push for stablecoin legislation could come down to seeing how much lawmakers can accomplish before the election to run for the next Congress, said Carbone of the Digital Chamber of Commerce.
“We might not be able to pass it by December 31st, but we might get it to a really good place,” Carbone said, “or we’ll start the 119th Congress next January and have a product that’s almost final.” “
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