<p><span style="font-weight: 400;">Hearings on stablecoins before both the House and Senate in the next two weeks are scheduled to feature just one witness: The Treasury official spearheading recent work on stablecoins, sources tell The Block. </span></p> <p><span style="font-weight: 400;">Nellie Liang, the Treasury’s undersecretary for domestic finance, is slated to appear before the House Financial Services Committee on February 8 and before the Senate Banking Committee will host Liang on February 15, according to four staffers and sources with knowledge of the matter. </span></p> <p><span style="font-weight: 400;">In both cases, Liang is likely to be the sole witness, though sources indicate that the plan for the Senate hearing remains more malleable. </span></p> <p><span style="font-weight: 400;">Neither committee has published their witness lists as of press time. The Financial Services Committee </span><a href="https://financialservices.house.gov/events/eventsingle.aspx?EventID=409026"><span style="font-weight: 400;">only</span></a><span style="font-weight: 400;"> includes the hearing title: “Digital Assets and the Future of Finance: The President’s Working Group on Financial Markets’ Report on Stablecoins.” </span></p> <p><span style="font-weight: 400;">The Banking Committee, meanwhile, had not yet added the hearing to its </span><a href="https://www.banking.senate.gov/hearings"><span style="font-weight: 400;">schedule</span></a><span style="font-weight: 400;">, only including it in an email to press that mentions a hearing called “Examining the President’s Working Group on Financial Markets Report on Stablecoins.”</span></p> <p><span style="font-weight: 400;">In both cases, the committees are planning on a deep dive into the report itself. </span></p> <p><span style="font-weight: 400;">While the crypto industry may be displeased with not having a seat at the table, they have been at a number of other recent hearings, including </span><a href="https://www.theblockcrypto.com/post/127515/senate-hearing-on-stablecoins-forecasts-new-regulations-but-from-where"><span style="font-weight: 400;">another focused on stablecoins</span></a><span style="font-weight: 400;"> before the Banking Committee in December. </span></p> <p><span style="font-weight: 400;">Liang’s centrality to the conversation makes sense. The President’s Working Group is a joint effort involving the Federal Reserve, the Securities and Exchange Commission and the Commodity Futures Trading Commission. However, the Treasury Secretary — currently Janet Yellen — chairs the President's Working Group (PWG). </span></p> <p><span style="font-weight: 400;">Given that the PWG’s stablecoin concerns focused on prudential risk — specifically, whether these tokens are verifiably backed by appropriate funding — Yellen delegated the report to Liang. </span></p> <p><span style="font-weight: 400;">Beyond summarizing the stablecoin market for policymakers, the </span><a href="https://www.theblockcrypto.com/post/122890/us-treasury-releases-long-awaited-report-on-stablecoin-risk-features-request-for-new-laws"><span style="font-weight: 400;">report made recommendations</span></a><span style="font-weight: 400;"> for more transparency in stablecoin reserves and redemption practices. Most controversially, the PWG report advised Congress to pass new law limiting stablecoin issuance to insured depository institutions. </span></p> <p><span style="font-weight: 400;">That effectively limits the field to banks, though stablecoin issuer Circle has said it is seeking that registration while also denying that it should be required of future issuers. </span></p> <p><span style="font-weight: 400;">Limiting issuance has proved controversial with lawmakers on both sides of the aisle, as it seems to lock in incumbents, whether they be established crypto firms like Circle or traditional giants of finance like JPMorgan Chase, and lock out potential newcomers. The Treasury has, however, seemed to maintain its support for the restriction, a push that Liang is still spearheading. </span></p> <p><span style="font-weight: 400;">The report subsequently leveled the threat of action by the Financial Stability Oversight Council in the absence of new legislation on stablecoins. However, speaking with </span><a href="https://www.politico.com/news/2021/11/17/treasury-undersecretary-nellie-liang-522884"><span style="font-weight: 400;">Politico’s Victoria Guida</span></a><span style="font-weight: 400;"> shortly after the report’s November release, Liang said “in the absence of legislation, FSOC can try to take some actions. But it’s not a full substitute.”</span></p> <p>The Treasury's press office did not respond to a request for comment as of publication time. </p><br /><span class="copyright"><p>© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.</p> </span>