US lawmakers advocating for stablecoin regulations have accused the Democrats of obstructing the process. Moreover, concern is growing that stablecoin legislation could open the door for tech giants to issue their own stablecoins.
According to the chair of the House Financial Services Committee, Patrick McHenry, stablecoin legislation was within reach, but it is being stonewalled by the White House.
Stablecoin Bill Blocked
On July 27, Congressman Patrick McHenry said: “Democrats are obstructing this good work at the behest of the White House.”
His comments were in reference to the failure to reach a bipartisan agreement on stablecoin legislation.
“Americans deserve clarity for payment stablecoins and there has been good faith, bipartisan work to deliver that clarity.”
The news comes a day after the House Financial Services Committee approved three crypto bills for a full House of Representatives vote.
“Today I had hoped to announce an agreement with the ranking member on stablecoins legislation,” McHenry said. “This will not be the case… It was the White House’s unwillingness to compromise that has once again brought that negotiation to a halt,” he continued.
Take a look at our guide to understand what a stablecoin is.
For stablecoin legislation to pass into law, it would need support in the Democrat-led Senate. Moreover, this is also the case for the digital asset regulations approved this week. However, pushback has been predicted from the largely anti-crypto Democrats. They have initiated a war on the industry this year via federal regulators.
The Committee’s senior Democrat, Maxine Waters, said the stablecoin bill was “deeply problematic and bad for America.”
Democrats were concerned about the reserve provisions in the bill. They also argued over the differing opinions on which regulators should oversee stablecoins.
Citing the lack of oversight from the Federal Reserve, Waters added: “I urge Republicans to pull this extremist piece of legislation from the markup and your culture wars,”
Tech Giant Issuance Concern
There is also concern that tech and social media titans such as Twitter, Meta, and Google could issue their own stablecoins.
Waters went on to state that a “concern” with the legislation would be that it could open the door for “Twitter X to establish itself as a global payments provider via the issuance, directly or indirectly, of a stablecoin.”
This was “a frightening proposition,” she added.
Republican Ralph Norman echoed the sentiment. “Right now this bill contains no commercial entity prohibition,” he said before adding:
“This means that the large tech companies like Facebook, and retail companies like Amazon, could become a stablecoin issuer and further dominate our lives.”
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