Discussions among lawmakers have stagnated for months as the upcoming election season draws near, rendering the passage of bills in Washington nearly impossible.
Despite this, lawmakers involved in drafting stablecoin bills express optimism about legislative progress in both the Senate and the House. However, a stablecoin bill, viewed as relatively achievable compared to other crypto-related bills, has encountered obstacles, with time running out to bring it to a vote.
A stablecoin bill spearheaded by House Financial Services Committee Chair Patrick McHenry, R-N.C., made headway out of the committee over the summer. However, it faced bipartisan contention, with Congressional Republicans attributing opposition to the White House. Notably, top Democrat Maxine Waters of California criticized the bill as “deeply problematic,” citing a provision allowing state regulators to approve stablecoin issuances without Federal Reserve input.
Although Waters and McHenry have increased their interactions since then, discord persists regarding the primary regulator for stablecoin issuers.
McHenry remarked on Wednesday at Coinbase’s Update the System Summit, indicating a “workable frame” for progress. He emphasized the need for a legislative vehicle and a deadline to address unresolved issues effectively.
Cody Carbone, vice president of policy for the Chamber of Digital Commerce, noted ongoing talks between McHenry and Waters’ teams but highlighted minimal progress on substantive issues.
Regarding the bill’s prospects in the House, Carbone suggested a 50% chance of passage but a mere 5% likelihood of enactment into 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 a stablecoin bill focusing on regulatory clarity and consumer protection. However, uncertainties surround the bill’s details and completion strategy, with discussions facing setbacks.
Lummis expressed optimism about bipartisan efforts, citing Senate Majority Leader Chuck Schumer’s openness to consider such legislation. She anticipates progress on stablecoins in 2024.
Despite challenges, stakeholders are encouraged by legislative efforts in both chambers, expressing optimism about achieving consensus before the year concludes.
However, hurdles remain, with the Senate Banking Committee prioritizing other issues, potentially impeding progress on stablecoin legislation. Efforts to package bills, such as a potential compromise between stablecoin and marijuana banking bills, offer glimmers of hope, but challenges persist in navigating House gridlock.
Ultimately, lawmakers aim to position themselves for the next Congress, emphasizing the importance of advancing stablecoin legislation despite potential delays beyond the year’s end.
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