“Maxine Waters and Patrick McHenry Nearing Final Stages of Stablecoin Legislation in House Financial Services Committee”
Representative Maxine Waters and Committee Chair Patrick McHenry are nearing the finalization of the Stablecoin Bill in the House Financial Services Committee.
The legislation focuses on regulating stablecoins and implementing bank redemption operations, requiring only a few additional amendments.
Coin Center criticized the Lummis-Gillibrand Payment Stablecoin Act introduced in the Senate, describing it as poor policy and possibly unconstitutional.
Congress corridors buzz with the House Financial Services Committee nearing a breakthrough in stablecoin legislation. At the forefront of these efforts are Representative Maxine Waters and Committee Chair Patrick McHenry, spearheading a collaborative campaign to improve and develop a bill promising to shape the future of banking services and cryptocurrencies.
In a recent interview with Bloomberg, Representative Waters shared her insights on the legislative process, highlighting the constructive dynamics between her and McHenry. Their focus has been on developing regulations for stablecoins, which are cryptocurrencies designed to have stable values tied to traditional assets, and implementing robust security networks for banking operations.
Waters noted that the bill is almost ready for presentation to the legislative floor, requiring only a few additional amendments for full approval by the House.
The legislative journey for stablecoins is not without challenges.
On the Senate side, a new proposal has sparked significant controversy among cryptocurrency supporters. The Lummis-Gillibrand Payment Stablecoin Act, led by Senators Kirsten Gillibrand and Cynthia Lummis, faced criticism from Coin Center.
The advocacy group deeply rooted in cryptocurrency issues pointed out that the bill’s approach towards algorithmic stablecoins—those backed by algorithms rather than physical assets—could be harmful and unconstitutional.
According to Coin Center, the bill’s attempt to ban such financial instruments directly targets the core code of these technologies, potentially violating First Amendment rights.
Coin Center’s points are clear. While regulatory oversight such as SEC registration requirements for some products may be acceptable, a complete ban on the business model may stifle innovation within this sector.
The organization emphasized that “if one can comply with securities laws, one should be able to bring a product to market,” underscoring the need for balanced regulatory measures that foster innovation while ensuring market stability.
Jerry Brito, Executive Director of Coin Center, expressed cautious optimism about the efforts to regulate stablecoins. According to him, the proposed legislation represents a commendable attempt to align American financial practices with the cryptocurrency landscape.
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The bill mandates that entities sanctioned by the U.S. are allowed to issue dollar-backed stablecoins, aiming to safeguard the financial system while accommodating the unique aspects of cryptocurrencies.
Additional legislative developments indicate a softened approach to regulating these digital assets. The Clarity for Digital Dollar Payments Act, another significant legislative effort soon to face a full House vote, proposes a two-year optional halt on banning algorithmic stablecoins instead of a complete ban. This approach reflects a growing recognition in Congress of the need to strike a balance between regulatory oversight and the innovative potential of the cryptocurrency market.
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