Jul 27, 2023

House lawmakers have failed to reach a bipartisan deal on stablecoins legislation, with Financial Services Committee Chair Patrick McHenry (R-N.C.) blaming White House intransigence for the stalemate while the panel's top Democrat said it was McHenry who shut down the talks.

Video transcript

Let's talk about a bill that almost was another bump in the road as house lawmakers have failed to reach a bipartisan deal on stable coins legislation, financial Services Committee chair Patrick mchenry blames the White House while the panel's top Democrat said it was mchenry himself who shut down talks. The news comes a day after three bills were advanced on crypto issues to a vote in the full House of Representatives. Let's take a listen to what mchenry had to say at the House Financial Services Committee today. Unfortunately, there was a third party in this negotiations that not did not share that same sense of urgency. The White House, a bipartisan deal was within reach. We were closer than we've ever been a few small but nonetheless important provisions stood between us and a deal and I'm gonna toss this one off to you. What do you make of these remarks? You know, we have mchenry saying the White House jumped in the Democrats saying it was actually mchenry. The fact of the matter is we still don't have any clear regulation in the US when it comes to stable coins. What do you think of, of this stalemate. Um Well, um unfortunately, I don't have much insight uh on, on, on what happens uh in, in, in the Wars of, of the Congress or White House. Uh but from, but, but, but from this piece, we are talking about a kind of, you know, it, it, it seems to me there is no actual consensus between Democrats and Republicans uh on, on, on the bill. Uh given the uh critique by Maxine Waters for the bill that it's um you know, given what she said, let me, let me just let me just uh find her quote uh that, that the bill was deeply problematic and bad for America. Like that doesn't sound for me that the consensus was that the deal was within reach when, when somebody's uh uh when somebody doesn't like the bill so much. Um So, um you know, maybe, maybe there is uh still uh a lot of ground to cover uh in, in Congress for Democrats and Republicans to agree what this um future legislation should be like. And uh a lot of things to um you know, a lot of problematic points for both sides. Clear. Yeah, I mean, this is like Fox News or CNN comes to crypto right now. We have a back and forth on Capitol Hill and this is only going to be happening more and more in the near future. Why? Because stable coins, Bitcoin mining, all these things are becoming more and more important to the general populace. I mean, we had that poll from a few years ago showing about 17% of American citizens own Bitcoin and then the decent amount of people are also owning other assets besides Bitcoin. Right, which have even further legal concerns around them. For instance, staking is staking a security or not. That's a hot topic. Stable coins as well are a hot topic. The reason being is, you know, allows for permission transfer of money so easily across borders and national governments are going to have an interest in that, especially the central banks around us. We talked last week about fed. Now, essentially a means for banks to move money between each other. Very quickly. New through new infrastructure from the Federal Reserve. Stable coins are competitor to that and they're also outside of that system, right? And so we're going to see the fed, the Congress a lot about the other, these administrative bodies become interested in talking about these subjects. It's not going to be dealt with in a day. Uh This legislation was moved forward by mchenry only last week. It looks like it's a fresh push. I wouldn't expect this to move forward in any meaningful sense for quite a while, possibly even years based on how a lot of things take a lot of time to move through Capitol Hill. Um There's going to be a lot of considerations about how do we redefine what it means to be a dollar in the wake of what tokenization has brought. Uh, just the fact that you need all these licensing regimes within the United States. Like every state, you have to go get some sort of money transfer license, then you have to go on the federal level, then you have to go talk to all these banks pretty messy system. But that's from the traditional financial system where, you know, you probably only want to operate in one state if you're a bank, maybe a few. And so it was ok that way. But now tokenization, hey, I want to be able to operate every single bank and or I want to operate in every single state and maybe even more than that, I want to operate in every single country. So it's going to take quite a while. I think we're just seeing the first shot. There's going to be back and forth for quite a while. It's not super surprising to me, Jen. Yeah, there was a response in the article to the comments that Anna you brought up from Maxine Waters mchenry said this will not be the case. It was the White House's unwillingness to compromise that has once again brought this negotiation to a halt. When I read this story will I also thought about Fed now, you know, solving a lot of the problems that stable coins can solve when it comes to settling payments, especially payments across borders. I think it's interesting to see this debate happening at the in the level at which the debate is happening. If we compare it to other jurisdictions, of course, we have the MC A regulation that's set to take place in the EU in 2024 and stable coins kind of fall under that. We have countries in Asia that are looking at regulating stable coins and here it feels like we can't even get on the same page. I think this is just, um, you know, another, another note in the book that shows that the US is behind other jurisdictions when it comes to regulating crypto and we continue to become more and more behind. So hopefully, hopefully we can, we can get a few wins in the book. So we don't push, um, companies to start looking at other areas to operate in.

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