Lawmakers refused to vote on regulating stablecoins

Lawmakers in the US House of Representatives are delaying consideration of a bipartisan bill to limit potential risks posed by so-called stablecoins, according to people familiar with the matter, delaying a vote on the measure for at least several weeks.

The potential deal marked an important first step to apply stricter rules to the cryptocurrency industry, which was developed with virtually no regulation. Biden administration officials and a group of bipartisan lawmakers are concerned that existing laws do not provide comprehensive standards for new assets and have warned of the potential risks to financial stability posed by stablecoins, a type of cryptocurrency intended to be pegged to the dollar or other citizens. Currency.

People said lawmakers working on the potential deal between House Financial Services Committee Chair Maxine Waters and Patrick McHenry, the committee’s top Republican, were unable to complete work on the bill before a planned committee vote tentatively scheduled for July 27.

That will likely delay consideration of the package until at least September, when Congress is expected to return from recess in late summer. A spokeswoman for Waters and McEnery did not immediately respond to a request for comment.

Lawmakers and their staff worked over the weekend to try to work out remaining policy issues with the legislation, which senior Biden administration officials have pushed for. However, as of the morning of July 25, the bill had not been finalized and at least some key issues remained pending.

read Cryptocurrency market ‘too mature’ for deals amid explosion

One of the people said these issues include standards around so-called custodians. The person said Treasury officials pushed for wallet items that Republicans were uncomfortable with. Treasury officials have provided assistance in drafting the bill but have yet to ratify it.

In a call with Waters on July 22, Treasury Secretary Janet Yellen praised the work in progress, but stopped short of endorsing the bill, people familiar with the call said. One person said she needed to review the White House, which has not yet intervened in the bill publicly.

Policy makers are concerned that stablecoins could be vulnerable to mass withdrawals by investors if doubts arise about their ability to continue redeeming their tokens in a one-to-one ratio of the official currencies. This could lead to a scramble for stablecoin issuers to liquidate their reserves, putting downward pressure on asset prices and potentially hurting the broader financial markets.

But some regulators and bankers worried about how quickly supporters of the bill planned to vote on the measure in the committee. The Independent Community Bankers of America, an influential lobbying force on Capitol Hill, on July 22 called on Waters to defer consideration of the bill, citing the need for input from bankers and other stakeholders.

Officials with the Securities and Exchange Commission and other regulators also expressed concerns about the bill.

write to Andrew Ackerman at [email protected]

This article was published by Dow Jones Newswires, an associate brand of the Dow Jones Group

Leave a Reply

%d bloggers like this: