Fate of stablecoin bill in doubt as House Financial Services Committee misses key deadline

The much talked-about but never resolved stablecoin bill still is not ready to see the light. With this Congress coming to a close and August recess beginning in days, the bill's odds of becoming law suddenly became very slim.

Maxine Waters (Calif.) and Patrick McHenry (N.C.), respectively the lead Democrat and Republican on the House Financial Services Committee, have been hard at work on a bipartisan agreement on stablecoins. They have effectively conceded that time has run out in statements today at a committee markup. 

"We're close. We're not there yet, but we're close," McHenry said. Waters issued a written statement saying:

"Although the Ranking Member, Secretary Yellen and I have made considerable progress towards an agreement on the legislation, we are unfortunately not there yet, and will therefore continue our negotiations over the August recess. It’s critical that we continue moving the ball forward on this so we can have a regulatory framework that protects consumers, while allowing for responsible innovation."

News broke last week that the pair were working on a deal that the US Treasury was brokering. Critically, it seemed the Treasury was willing to abandon its early push to limit stablecoin issuance to FDIC-insured financial institutions. 

"We want to make sure that this bill — this law — is technically proficient and a workable law. We don't want a dead letter as soon as we pass this thing," McHenry said, pointing to New York's stablecoin regime as the most robust currently in effect. 

Midterm elections are coming in November, and Democrats look likely to lose the House of Representatives. If that happens, McHenry seems on track to take over leadership of the committee. Waters used the occasion of today's statement to highlight a series of developments on cryptocurrency to come out of the House Financial Services Committee under her leadership, dating back to the creation of the Fintech Task Force and the subsequent hearings on Facebook's Libra in 2019.