House Lawmakers Rekindle Stablecoin Regulation Debate, Revealing Partisan Rifts

Lawmakers in the US House of Representatives are again looking at regulations on stablecoins under new Republican leadership, but partisan differences and bickering between the two sides may delay the passing of any new law on the topic.

The hostile attitudes across partisan lines were described in a recent Bloomberg report as “a bad sign” for any prospects of reaching a quick agreement, despite stablecoins being one of a few areas where Democrats and Republicans in the past have found some common ground.

The bickering again came to light on Wednesday this week, when Republicans and Democrats on a House Financial Services Committee subcommittee began a hearing on the topic titled “Understanding Stablecoins’ Role in Payments and the Need for Legislation.”

At the hearing, Patrick McHenry, the Republican representative who chairs the committee, said a draft bill released earlier this month – supposedly after negotiations between him and top Democrat Maxine Waters – should be the foundation for a federal framework on the matter.

Despite this, Maxine Waters said that she and McHenry never completed negotiations, and that the recent draft should be disregarded.

“Unfortunately, a lot of things have happened in between. I think we’re starting from scratch,” she was quoted by Bloomberg as saying.

She added that Republicans have indicated that they intend to write their own bill and said that if that happens, Democrats would do the same.

Once that is done, negotiations between the two sides can start over again, she said.

USDC issuer makes a case for stablecoins

Among the witnesses at Wednesday’s stablecoin-focused hearing was Dante Disparte, chief strategy officer and head of global policy at USDC-issuer Circle.

Among other things, Disparte at the hearing made a case for why dollar-denominated stablecoins are far better than cash for use cases such as foreign aid and disaster relief.

Circle’s Chief Strategy Officer and Head of Global Policy @ddisparte spoke to bipartisan Members of Congress on the urgent need to pass payment stablecoin legislation. https://t.co/2v8LsJseWg pic.twitter.com/Iuey8U5cE4

— Circle (@circle) April 19, 2023

Ahead of the hearing, Disparte said he looked forward to representing Circle in front of lawmakers from both parties, and noted that the hearing marks the first time a comprehensive stablecoin bill is shared in response to recommendations from the President’s Working Group on Financial Markets.