GOP Representative Accuses White House of Delaying Stablecoin Legislation

GOP Representative Accuses White House of Delaying Stablecoin Legislation

  • Approval of the stablecoin bill is likely to be delayed until next year with legislative elections approaching.
  • Patrick McHenry, a member of the Financial Services Committee, revealed that there was an agreement between Republicans and Democrats to regulate stablecoins.

Republican Rep. Patrick McHenry, a member of the House Financial Services Committee, said White House officials are delaying discussion and passage of a stablecoin bill.

A vote on the bill was scheduled for late last month, but the legislative debate on the proposal has been at a standstill ever since. However, the North Carolina representative said there is still time to pass the bill.

If it is not approved in this legislative period that is about to end, the discussions on the comprehensive stablecoin bill will be left for after the mid-term legislative elections that will be held on November 8.

"I’m optimistic that we can still get something done this Congress," McHenry said. "It’s up to the administration to come to the reality of votes on the Hill," he added.

Despite the delays, the Republican representative thanked his Democratic colleague, Maxine Waters, chair of the House Financial Services Committee, for her willingness to pass the bill.

On the Flipside

  • The Democratic Party has the majority in Congress to pass the stablecoin bill; however, it has not done so.
  • According to McHenry, it is very important to have bipartisan legislation on this matter.

For the Republican representative, the Biden administration and the policymakers in Congress “are in different places.” The lawmaker apologized to his fellow Democrats on Capitol Hill for delays in passing cryptocurrency regulations, saying there was “goodwill” to move forward.

The proposed legislation contemplates a two-year ban on algorithmic stablecoins. It also states that any such stablecoin project must first pass an examination by regulators.

Since the collapse of the TerraUSD ecosystem, Washington lawmakers and regulators have focused on a deeper discussion of the risks and benefits of stablecoins.

But suddenly, and despite a bipartisan agreement to pass the proposed legislation, discussion of the bill stalled over the summer. Even the regulators that make up the Financial Stability Supervisory Council have called for legislation to be passed as soon as possible on this matter.

An “Ugly Baby” About to Be Born

This week Rep. Patrick McHenry said that the federal government does not have a definition of the nature of stablecoins and other digital assets. But on the other hand, the legislators of the Republic Party and the Democratic Party do agree on this type of asset that has 1:1 backing without leverage.

McHenry called the stablecoin bill being discussed in the US Congress an “ugly baby.” He said that in the next Congress, “Financial Services will be the primary mover on digital asset legislation,” no matter what happens in the coming months.

Why You Should Care

  • Due to their rapid growth in the US and the rest of the world, stablecoins are among the most important digital assets that require regulation.
  • A recent Binance report revealed that from 2020 to 2021, the stablecoin market grew by 3,000%.

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