Democrats blasted draft legislation regarding stablecoins on Wednesday for not being as “bipartisan” as initially planned.
The bill, created by Reps. Maxine Waters (D-Calif.) and Patrick McHenry (R-N.C.) last year, was praised by Republicans, but criticized by their left-wing counterparts as ‘outdated.’
The House Financial Services Committee published a draft version of the stablecoin bill on April 15, designed to “provide requirements for payment stablecoin issuers,” alongside “research on a digital dollar.” Stablecoins are digital assets pegged to fiat currencies like dollars or euros, acting like digital dollars that don’t use a bank, and instead use the settlement assurances of blockchain.
The presently unnamed legislation was discussed at length between Waters, McHenry, and other members of Congress last year, with the Treasury Department contributing to create the first concrete laws tailored to a significant portion of the crypto industry.
Yet when actually reading the completed first draft during a committee hearing on Wednesday, Waters said the bill felt wholly different from what had been discussed.
“Mr. McHenry alarmed me somewhat when he said that the members on his side of the aisle had come up with a whole new bill,” Waters said. “The posted bill in no way represents … negotiations between the two of us … I think we’re starting from scratch.”
Stephen Lynch (D-Mass.), the senior Democrat on the digital assets subcommittee, questioned the very function of stablecoins, noting that they’re more frequently used for “speculative cryptocurrency trading and investments” than for actual payments.
McHenry, who serves as committee chair, objected to this stance, saying the bill is important “both internationally and domestically.”
Rep. French Hill (R-Ark.) also found that the bill was more bipartisan than given credit for, calling it “Maxine McHenry.”
Both McHenry and Waters agreed, however, that much had happened since the last negotiations on the bill took place – including the collapse of FTX. They also agreed that fast action was needed to update the bill and ensure the United States got up to speed with the rest of the world.
The proposed bill would disallow any business from issuing stablecoins besides subsidiaries of insured depository institutions, or licensed non-bank entities.