Lawmakers are pushing for regulations on stablecoins and criticizing the SEC’s enforcement approach. During a recent hearing, Commissioner Hester Peirce mentioned that the agency has the ability to provide clarity but has not done so effectively.
Congresswoman Maxine Waters, a key Democrat on the House Financial Services Committee, is calling for bipartisan agreement on stablecoins by the end of 2024. She emphasized the importance of robust federal regulations and consumer protections in the final framework. Waters has been working with Republican Rep. Patrick McHenry on a bill to regulate stablecoins since 2022. Although a version of the bill was advanced in 2023, it has faced challenges gaining broader support due to disputes over state regulators approving stablecoins without the Federal Reserve’s input.
Waters highlighted the necessity for stablecoins to be backed by secure reserves like short-term Treasury bills to ensure stability. She also stressed the need for the Fed to play a supervisory role, similar to frameworks in other countries. McHenry expressed hope for progress on stablecoin legislation and called for more regulatory clarity around digital assets.
The hearing also included testimony from all five US Securities and Exchange Commission commissioners, including Chair Gary Gensler and Commissioner Hester Peirce. Lawmakers questioned the SEC’s approach to digital asset regulation, criticizing the agency’s lack of clear guidelines. Peirce agreed with the criticism, stating that the SEC has the tools to provide clarity but has not done so effectively. She mentioned that the SEC’s ambiguous stance on token classification creates confusion in the market.
Other commissioners echoed Peirce’s concerns, with Mark Uyeda noting that the SEC has various tools available to address regulatory gaps in the digital asset space. The discussion during the hearing also touched on broader rulemaking issues and the need for regulatory clarity in the industry. As the legislative session nears its end, significant bills related to stablecoins and digital assets must be passed soon.