- House Financial Services Chair Patrick McHenry and ranking member Maxine Waters met with Senate Majority Leader Chuck Schumer last week to discuss potential stablecoin legislation
- The discussions explored tying the stablecoin bill to critical legislative items such as the Federal Aviation Administration reauthorization and a proposed cannabis banking bill
- There are opportunities for the stablecoin bill to be attached to significant legislative efforts like the NDAA or other substantial bills during the upcoming sessions or the end-of-year lame-duck session
Recent discussions between House leaders and Senate Majority Leader Chuck Schumer may lead to action on stablecoin legislation during this summer’s session or in the year-end lame-duck session, according to investment bank TD Cowen.
Stablecoin Bills
House Financial Services Chair Patrick McHenry and ranking member Maxine Waters met with Schumer last week to deliberate on stablecoin legislation, a key area of financial technology that needs regulatory clarity.
According to reports from Punchbowl News and Politico, the discussions also explored the possibility of tying the stablecoin bill to critical legislative items such as the Federal Aviation Administration (FAA) reauthorization and a proposed cannabis banking bill.
The urgency for the FAA reauthorization, which is currently set for a May 10 deadline, might be extended due to international concerns, notably recent tensions following an attack by Iran. This situation may provide Congress with additional leeway to craft and negotiate a broader legislative package that includes stablecoin regulation. The House and Senate are currently resolving differences in their FAA reauthorization bills, with a focus on safety issues.
Waters and McHenry have been developing a regulatory framework for stablecoins, primarily focusing on the jurisdiction of regulatory authorities. Although the committee advanced the bill, partisan disagreements and a controversial provision regarding the role of state regulators in stablecoin issuances stalled progress.
Meanwhile, in the Senate, Senators Cynthia Lummis and Kirsten Gillibrand are preparing to introduce a bill aimed at clarifying stablecoins and protecting consumers. There is ongoing discussion about linking this effort with the Secure and Fair Enforcement Regulation Banking Act, which seeks to enable banking services for the marijuana industry, although challenges remain due to opposition from certain key lawmakers.
Prospects For Compromise
The prospect of a legislative compromise remains uncertain, especially given House Speaker Mike Johnson’s opposition to the marijuana banking bill. However, the upcoming sessions and the end-of-year legislative flurry provide multiple opportunities for the stablecoin bill to be attached to significant legislative efforts such as the NDAA or other substantial bills during the lame-duck session.
Conclusion
The odds of stablecoin legislation being introduced this year have risen following the key discussions among lawmakers. While partisan disagreements pose challenges, the stablecoin bill may be attached to larger legislative packages in the upcoming Congressional sessions. The urgent need for regulatory clarity in crypto could help drive bipartisan compromise on stablecoin rules in 2022.
