Rep. Maxine Waters, the ranking Democrat on the House Financial Services Committee, has called for a bipartisan agreement on stablecoins by the end of 2024.
At a committee hearing on September 24, Waters expressed optimism that a legislative agreement could be reached, stressing the need for strong federal regulations and consumer protections in the final framework.
Waters said:
“Mr. President, before the end of the year, I want us to reach a major agreement on stablecoins and other long-awaited bills. Since 2022, we have worked tirelessly to reach an agreement and have both made concessions.”
Stablecoin Bill
Waters and Republican Rep. Patrick McHenry, the committee chairman, have been collaborating on a bill to regulate stablecoins since 2022, with the goal of creating a solid regulatory foundation for the industry.
The committee introduced a version of the bill in 2023, but it struggled to gain broader support due to disputes over provisions allowing state regulators to approve stablecoins without the Federal Reserve’s advice, a measure Waters described as “deeply problematic.”
Waters stressed the importance of ensuring the stability of cryptocurrencies by backing them with safe reserves, such as short-term Treasuries. She also stressed the need for the Fed to maintain a key oversight role, similar to that of other countries.
McHenry expressed hope for progress on stablecoin legislation while calling for greater regulatory clarity around digital assets. He said he is “optimistic” about stablecoin regulation and hopes it will lead to “much-needed clarity on digital assets.”
As the legislative session draws to a close, Congress is expected to pass some major bills soon. McHenry also noted that his cryptocurrency market structure bill, known as FIT21, could gain momentum before the end of the year.
Commissioners testify
The hearing also featured testimony from the five commissioners of the U.S. Securities and Exchange Commission, including Chairman Gary Gensler and Commissioner Hester Peirce.
Lawmakers focused their questions on the agency’s handling of digital assets and broader rulemaking issues, with Republicans criticizing the SEC’s “regulation-by-enforcement approach” and questioning whether the regulator was capable of providing regulatory clarity to the industry.
Peirce agreed with lawmakers’ criticism of the agency’s ambiguous approach to regulating digital assets and said the SEC has the tools to provide clear guidance but has failed to do so.
She said:
“We (the SEC) have taken a legally imprecise position to mask the lack of regulatory clarity… We can provide guidance and choose not to.”
Peirce also pointed out that the SEC’s vague stance on token classification creates confusion in the market. She argued that the agency should have clarified that tokens themselves are not securities, which would help guide secondary sales and listings on platforms.
Other commissioners echoed Peirce’s concerns, with Mark Uyeda noting that the SEC has a wide range of tools to fill regulatory gaps, including setting standards for classifying tokens and crypto-related exchange-traded products.
