Negotiations over a comprehensive framework for payment stablecoins in the U.S. have stalled, House Financial Services Chair Patrick McHenry announced Thursday morning.
After beginning a public debate and amendment process meeting on stablecoin legislation before the committee, the North Carolina Republican said that progress had stalled, at least temporarily, due to White House opposition. He praised his Democratic counterpart on the committee, Rep. Maxine Waters, D-Calif., for her work on the bill.
“Unfortunately there was a third party in this negotiation that did not share the same sense of urgency: the White House,” said McHenry, kicking off Thursday’s markup of a different version of the stablecoin legislation that does not yet reflect the latest negotiations.
“A bipartisan deal was within reach,” he said, adding that negotiators “were closer than we’ve ever been” after 15 months of talks, interrupted by midterm elections, a turnover in majority control in the U.S. House of Representatives, and the FTX collapse and subsequent contagion within the digital asset industry.
Finger pointing starts
The stablecoin effort was seen as likely to gain more bipartisan support than Wednesday’s crypto market structure bill, which the committee still approved with six Democrats and all Republicans. But stalled talks may have soured that possibility.
Waters blasted the version of the stablecoin bill up for consideration Thursday, criticizing McHenry as “impatient” and calling the current version of the bill “deeply problematic and bad for America” due to a provision that allows state regulators to approve stablecoin issuances without Federal Reserve input. She also raised concerns that companies like Amazon and Facebook could issue their own digital currencies if the bill, as currently written, became law.
“The Fed does not support the bill, Treasury does not support the bill, and we do not have the support of those who asked us to get involved with stablecoins,” Waters added, referring to a presidential panel that initiated the stablecoin talks last year.
Banks raised similar concerns to those expressed by Waters in correspondence to the committee last week, though McHenry strongly pushed back on those criticisms in a response letter also sent last week.
Waters also pushed to postpone consideration of the bill, a vote that failed on party lines, 25-16.
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