Lawmakers in the US House of Representatives are delaying consideration of a bipartisan bill to curb potential risks posed by so-called stablecoins, according to people familiar with the matter, delaying a vote on the measure for at least several weeks.
The potential deal would have marked the first significant step in enforcing stricter rules in the cryptocurrency industry, which has developed with virtually no regulation. Biden administration officials and a bipartisan group of lawmakers are concerned that current laws do not provide comprehensive standards for new assets and have warned of potential financial stability risks posed by stablecoins, a type of cryptocurrency intended to be pegged to the dollar or to another nation. .currency
Lawmakers working on the potential deal between House Financial Services Committee Chairwoman Maxine Waters and Patrick McHenry, the panel’s top Republican, were unable to complete work on the bill before the vote. committee tentatively scheduled for July 27, the people said.
That is likely to delay consideration of the package until at least September, when Congress is expected to return from its summer break. Spokespeople for Waters and McHenry did not immediately respond to a request for comment.
Lawmakers and their staffs had worked over the weekend trying to resolve remaining policy issues with the legislation, which top officials in the Biden administration have pushed through. However, as of the morning of July 25, the bill was not finalized and at least some fundamental issues remained outstanding.
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Those issues include standards around so-called custodial wallets, one of the people said. Treasury officials pushed for wallet provisions that Republicans were uncomfortable with, the person said. Treasury officials have provided assistance with the drafting of the bill, but have not yet approved it.
In a call with Waters on July 22, Treasury Secretary Janet Yellen praised the work that was underway but stopped short of endorsing the bill, people familiar with the call said. One of the people said she needed to consult with the White House, which has yet to comment publicly on the bill.
Policymakers are concerned that stablecoins could be vulnerable to massive withdrawals by investors if questions arise about their ability to continue to redeem their tokens on a one-to-one basis for official currencies. That could force a scramble by stablecoin issuers to liquidate their reserves, putting downward pressure on asset prices and potentially damaging broader financial markets.
But some regulatory officials and bankers were uneasy about the speed with which supporters of the bill had planned to vote on the measure in committee. The Bankers of America Independent Community, an influential lobbying force on Capitol Hill, on July 22 called on Waters to delay consideration of the bill, citing the need for input from bankers and other interested parties.
Officials from the Securities and Exchange Commission and other regulators had also raised concerns about the bill.
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This article was published by Dow Jones Newswires, a brand of the Dow Jones Group.
