Democrats criticized the draft legislation about stablecoins on Wednesday for not being as “bipartisan” as planned.
The stablecoin bill, initiated by Reps. Maxine Waters (D-Calif.) and Patrick McHenry (R-N.C.) last year, was praised by Republicans but deemed “outdated” by their left-wing counterparts.
Starting From Scratch
On April 15, the House Financial Services Committee released a draft version of the stablecoin bill to “impose requirements for payment stablecoin issuers” with additional “research on a digital dollar.” Stablecoins are digital assets linked to fiat currencies and serve as digital dollars free of banks, relying instead on blockchain’s settlement assurances.
Last year, Waters, McHenry, and other members of Congress discussed the unnamed legislation with the Treasury Department, resulting in the first industry-tailored laws concerning crypto. However, Waters remarked on Wednesday that the final first draft of the bill felt entirely different from these discussions.
“Mr. McHenry alarmed me somewhat when he said that the members on his side of the aisle had come up with a whole new bill,” Waters said. “The posted bill in no way represents … negotiations between the two of us … I think we’re starting from scratch.”
Stephen Lynch (D-Mass.), the senior member of the digital assets subcommittee, questioned stablecoins’ role, noting that they are predominantly used for “speculative cryptocurrency trading and investments” rather than payments.
The Optimistic View
McHenry, who chairs the committee, opposed this stance, stating that the bill is crucial “internationally and domestically.”
Rep. French Hill (R-Ark.) also said the bill was more bipartisan than credited, naming it “Maxine McHenry.”
Despite this, both McHenry and Waters agree that numerous developments, including the FTX collapse, have transpired since the previous negotiations necessitated the bill’s update, bringing the United States in line with the rest of the world.
The proposed bill would authorize only subsidiaries of insured depository institutions or licensed non-bank entities to issue stablecoins.