2024-04-30
There is both optimism and skepticism surrounding the potential passage of a stablecoin bill.
Recently, new legislation has been introduced in the Senate with the aim of regulating stablecoins. Maxine Waters, the Ranking Democrat of the House Financial Services Committee, expressed confidence in the near future passage of a stablecoin bill.
Waters mentioned that she and Chair Patrick McHenry have been collaborating for the past 22 months and have made significant progress in drafting legislation that addresses concerns and brings together various stakeholders.
McHenry and Waters have been working together on a stablecoin bill that was previously approved by the Republican-led House Financial Services Committee last year.
However, at that time, Waters criticized the bill due to a provision that allowed state regulators to approve stablecoin issuances without involving the Federal Reserve.
Despite the optimism, there is still an ongoing issue regarding the primary regulator for stablecoin issuers.
Cody Carbone, the vice president of policy for the Chamber of Digital Commerce, emphasized this as the main obstacle that needs to be resolved. Carbone expressed doubts about any progress being made on this specific issue.
There has been no official statement from McHenry and Waters' offices regarding the resolution of the state versus federal regulation and supervision matter.
The Senate bill, introduced by Senators Kirsten Gillibrand and Cynthia Lummis, includes provisions for establishing federal and state regulatory frameworks for stablecoin issuers while maintaining the dual banking system.
The bill also sets a limit on the issuance of payment stablecoins by state trust companies, allowing them to issue up to $10 billion.
Carbone raised concerns about whether this provision would be considered a viable solution and compromise, as there has been no indication of McHenry's stance on this matter.
There is a possibility of including the stablecoin bill in the upcoming Federal Aviation Administration (FAA) reauthorization. However, the urgency to respond to Iran's attack on Israel might extend the timeline for the FAA reauthorization, which is scheduled until May 10.
Nonetheless, Carbone only gives a 35% chance of the stablecoin bill being included in the FAA reauthorization.
If the stablecoin bill is not included in the FAA reauthorization, it could potentially be attached to end-of-year bills such as the National Defense Authorization Act or be part of a legislative package that addresses financial services for the marijuana industry.
However, Carbone admits that finding a pathway for the bill's passage remains challenging.
In conclusion, there is a mix of optimism and skepticism regarding the progress of the stablecoin bill.
Efforts have been made to address concerns and bring together stakeholders, but unresolved issues regarding primary regulation and supervision still persist.
The bill could potentially be included in the FAA reauthorization or attached to other end-of-year bills, but the pathway to its passage remains uncertain.
