On Tuesday, during a House Financial Services Committee hearing, U.S. lawmakers exhibited a divide in their approaches to regulating cryptocurrencies and stablecoins, highlighting the challenges in establishing a bipartisan consensus on the matter.
The hearing revealed differing perspectives on the technology’s potential and its oversight, with some legislators expressing concerns over the previous administration’s approach to crypto regulation and others criticizing President Donald Trump’s memecoin.
Republican and Democratic leaders have proposed their own legislative drafts to regulate stablecoins. Rep. French Hill (R-Ark.) released a draft last week that would grant the Office of the Comptroller of the Currency authority over federally qualified nonbank payment stablecoin issuers. Conversely, Rep. Maxine Waters (NYSE:WAT) (D-Calif.) presented a discussion draft on Monday that includes provisions for federal regulation of stablecoins.
Former Commodity Futures Trading Commission Chair Timothy Massad criticized the Republican-led stablecoin bill during his testimony at the hearing, pointing out potential weaknesses in state standards and the lack of ongoing federal supervision.
Despite the criticism, investment bank TD Cowen deemed Hill’s discussion draft "workable." However, they anticipate that any agreement on stablecoin regulation will likely be partisan and not occur until after Congress addresses expiring tax cuts later this year.
TD Cowen’s Washington Research Group, led by Jaret Seiberg, noted that Waters’ bill would extend Federal Reserve authority over nonbank issuers and suggested that while the Waters and Hill bills are similar enough to allow for a deal, political obstacles may delay progress.
The crypto industry has been seeking regulation for stablecoins for some time. Ji Kim, acting CEO of the Crypto Council for Innovation, emphasized the growing popularity of stablecoins and urged Congress to set requirements for stablecoin issuers, including registration, reserve requirements, and compliance with the Bank Secrecy Act.
The hearing underscored the broader debate about the role of government in the rapidly evolving digital asset space and the need for a regulatory framework that addresses both innovation and consumer protection.
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