Rep. Maxine Waters calls for 'grand bargain on stablecoins' before the end of 2024 following years of negotiations

Top Democrat of the House Financial Services Committee Maxine Waters says she wants to "strike a grand bargain on stablecoins" before the end of the year, which could mark an end to two years of debate on passing stablecoin legislation in Washington.

Waters and Republican Rep. Patrick McHenry, who chairs that committee, have been working on a bill to create a regulatory framework for stablecoins since 2022. That legislation advanced out of the Republican-led committee last year but has not gained traction. At the time, Waters called the bill "deeply problematic" due to a provision that allows state regulators to approve stablecoin issuances without Federal Reserve input.

On Tuesday during a House Financial Services Committee hearing, Waters said she believes lawmakers could reach a deal on the bill that "prioritizes strong protections" for consumers and has "strong federal oversight."

"Mr. Chairman, before the end of this year, I want us to strike a grand bargain on stablecoins and other long overdue bills. Since 2022, we have been working for hours on end to reach an agreement and have each made concessions," Waters said.

The bill can have "several paths for stablecoins to be created," but like other countries, the Federal Reserve needs to have a "dominant role." Stablecoins also need to be backed by safe reserves, such as short-term Treasury bills, in order to be "truly stable," Waters added.

"I've made a public statement to you about bipartisanship — let's see what you do with it," Waters told McHenry.

McHenry said he was hopeful about stablecoin legislation and said he also wanted "clarity when it comes to digital assets generally."

Time is dwindling to get much done in Congress before the end of the year. This comes as McHenry is set to retire in January. Last week, McHenry said he believes a separate bill — his crypto market structure bill called shorthand FIT21 — could gain traction at the end of the year.

All five commissioners at the U.S. Securities and Exchange Commission are testifying during the hearing on Tuesday focused on oversight of the agency, including SEC Chair Gary Gensler. Lawmakers have peppered them with questions about digital assets, rulemaking and clearing.