Three US representatives on August 28 expressed concern about stablecoin and crypto regulations recently proposed by the Federal Reserve.
Today’s objection was signed by three U.S. Representatives: Patrick McHenry, chairman of the House Financial Services Committee; French Hill, chair of the Financial Services Committee’s Digital Assets Subcommittee; and Bill Huizenga, chair of the Financial Services Subcommittee on Digital Assets, Financial Technology and Inclusion. All three representatives are members of the Republican party.
Those legislators wrote in their objection:
“We are concerned that these actions are being taken to undermine Congress’s progress in establishing a regulatory regime for stablecoins… [this] will undoubtedly discourage financial institutions from participating in the digital asset ecosystem.”
Lawmakers objected to two rules: the Supervisory Non-objection Process for State Member Banks Seeking to Engage in Certain Activities Involving Dollar Tokens and the Federal Reserve’s Novel Activity Supervision Program.
The relevant rules, which were put forward on August 8, spell out broad requirements for banks working with crypto. The first set of rules requires banks to obtain a written no-objection from the Federal Reserve before issuing, holding or trading stablecoins. In the second case, banks would participate in a general crypto oversight program.
Two-way alternative
Representatives claimed that the two sets of rules effectively prevent banks from operating in the payments stablecoin or digital asset ecosystem, regardless of any compliance instructions that appear to be contained in the rules.
They complained that the rules were inconsistent with the Administrative Procedure Act and demanded more information from the Federal Reserve.
Despite their objections, the representatives recognized the need for regulation. Instead, they have proposed the Clarity for Payment Stablecoins Act – a bipartisan bill supported by Rep. Patrick McHenry, also one of the authors of the latest complaint.
After Republican lawmakers objected to the Fed’s proposed cryptocurrency, the stablecoin rules first appeared on CryptoSlate.