Recent discussions between House leaders and Senate Majority Leader Chuck Schumer may lead to action on stablecoin legislation during this summer’s session or in the year-end lame-duck session, according to investment bank TD Cowen.
House Financial Services Chair Patrick McHenry and ranking member Maxine Waters met with Schumer last week to deliberate on stablecoin legislation, a key area of financial technology that needs regulatory clarity. The urgency for the FAA reauthorization, which is currently set for a May 10 deadline, might be extended due to international concerns, notably recent tensions following an attack by Iran. This situation may provide Congress with additional leeway to craft and negotiate a broader legislative package that includes stablecoin regulation.
Waters and McHenry have been developing a regulatory framework for stablecoins, primarily focusing on the jurisdiction of regulatory authorities. Although the committee advanced the bill, partisan disagreements and a controversial provision regarding the role of state regulators in stablecoin issuances stalled progress.
Meanwhile, in the Senate, Senators Cynthia Lummis and Kirsten Gillibrand are preparing to introduce a bill aimed at clarifying stablecoins and protecting consumers. There is ongoing discussion about linking this effort with the Secure and Fair Enforcement Regulation Banking Act, which seeks to enable banking services for the marijuana industry, although challenges remain due to opposition from certain key lawmakers.
The prospect of a legislative compromise remains uncertain, especially given House Speaker Mike Johnson’s opposition to the marijuana banking bill. However, the upcoming sessions and the end-of-year legislative flurry provide multiple opportunities for the stablecoin bill to be attached to significant legislative efforts such as the NDAA or other substantial bills during the lame-duck session.
The future of stablecoin legislation in Congressional sessions remains uncertain, yet there is potential for action and progress in regulating this key area of financial technology. With discussions ongoing and various legislative opportunities on the horizon, stakeholders will need to navigate challenges and find common ground to move forward with stablecoin regulation.