Congresswoman Maxine Waters, the leading Democrat on the House Financial Services Committee, 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, emphasizing the need for robust federal regulations and consumer protections as part of the final framework.
Waters said:
“Mr. President, I want us to reach a major agreement on stablecoins and other long-awaited bills before the end of this year. Since 2022, we have been working tirelessly towards an agreement and we have both made concessions.”
Stable currency account
Waters and Republican Rep. Patrick McHenry, the committee chairman, have been working together since 2022 on a bill to regulate stablecoins, with the goal of creating a robust regulatory foundation for the industry.
The committee introduced a version of the bill in 2023, but has struggled to gain broader support amid disputes over provisions that allow state regulators to approve stablecoins without input from the Federal Reserve, a measure Waters described as “very problematic’.
Waters emphasized the importance of stable currencies backed by safe reserves, such as short-term government bonds, to ensure their stability. She also emphasized the need for the Fed to maintain an important supervisory role, similar to frameworks in other countries.
McHenry expressed hope for progress on stablecoin legislation while calling for broader 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.”
Now that the end of the legislative session is in sight, Congress must soon approve important bills. McHenry also noted that his separate crypto market structure bill, known as FIT21, could gain momentum before the year is out.
Commissioners testify
The hearing also featured testimony from all 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 regulatory issues, with Republicans criticizing the SEC’s “regulation by enforcement approach” and questioning the regulator’s ability to regulate the industry to provide clarity about the regulations.
Peirce agreed with lawmakers’ criticism of the agency’s ambiguous approach to digital asset regulation, stating that the SEC has the tools to provide clear guidance but has failed to do so.
She said:
‘We have [SEC] we have taken a legally inaccurate position to mask the lack of regulatory clarity… We can provide guidance and choose not to.”
Peirce further emphasized that the SEC’s vague position on token classification is causing confusion in the market. She argued that the agency should have made it clear that the tokens themselves are not securities, which would help guide secondary sales and platform listings.
Other commissioners echoed Peirce’s concerns, with Mark Uyeda noting that the SEC has a wide range of tools to address regulatory gaps, including defining standards for token classification and crypto-related exchange-traded products.