House lawmakers reveal rifts in plans for stablecoin legislation

House lawmakers have offered two different plans for stablecoin legislation, causing some disagreement and creating a possible speed bump in Congress’ cryptocurrency work.

House Financial Services Chair French Hill, R-Ark., and Rep. Bryan Steil, R-Wis., chair of the House Digital Assets, Financial Technology and Artificial Intelligence Subcommittee, on Feb. 6 released a 47-page discussion draft of a bill establishing a stablecoin framework.

However, on Feb. 10, Rep. Maxine Waters, D-Calif., the top Democrat on the House Financial Services Committee, introduced her own 84-page discussion draft of a stablecoin bill that she previously worked on with former House Financial Services Chair Patrick McHenry, R-N.C.

At a subcommittee hearing Feb. 11, Waters contended that the Republicans’ stablecoin legislation is “light on consumer protections.”

“In the legislation I release, there are robust protections for consumer wallets, including risk management and financial resource requirements to ensure consumers do not lose their payment stablecoins to the scams and fraud that have plagued the crypto industry for far too long,” Waters said.

Rep. Stephen Lynch, D-Mass., the ranking member of the House digital assets subcommittee, also expressed concern about deciding on how best to regulate digital assets.

“I agree with most of my colleagues that a regulatory regime is needed, but not one that reflects a wish list from industry advocates,” Lynch said at the hearing. “As this committee considers legislation to address stablecoins and the market structure, I hope we can have collaborative and bipartisan discussions.”

Steil said he and Hill “appreciate feedback from all relevant stakeholders” on their stablecoin bill and contended that achieving regulatory clarity will take collaboration.

“Together, we can ensure that stablecoin issuers, digital asset firms and blockchain developers operate under fair, transparent and predictable rules in the United States,” Steil added.

Also on Feb. 11, other Republican lawmakers expressed high hopes about the chances of passing digital asset legislation this year at a webinar hosted by the Federalist Society.

Sen. Cynthia Lummis, R-Wyo., chair of the Senate Banking Subcommittee on Digital Assets, said Congress will likely tackle stablecoin legislation before turning to what lawmakers often call a “market structure bill,” adding that she thinks “both get across the finish line this year.”

In May, the House passed a bill that would give the Commodity Futures Trading Commission new oversight of the digital commodities market and maintain the SEC’s authority over the digital securities market.

That bill never passed the Senate, but Lummis said lawmakers are working to “marry” the bill with other legislation that she previously worked on with Sen. Kirsten Gillibrand, D-N.Y.

“I just get the sense that we are going to get it done. We really are,” said Rep. Dusty Johnson, R-S.D., chair of the House Agriculture Subcommittee on Commodity Markets, Digital Assets and Rural Development.

At a news conference Feb. 4, Senate Banking Committee Chair Tim Scott, R-S.C., said his goal is to be “as aggressive as possible to achieve an objective of having bills through the Senate in 100 days.”