During a recent hearing, a prominent Democrat on the House Financial Services Committee took the opportunity to advocate for a compromise on stablecoin legislation. U.S. Rep. Maxine Waters emphasized the need for bipartisan cooperation in regulating U.S. stablecoin issuers, urging for a “grand bargain” that prioritizes consumer protection and federal oversight.
While Waters expressed optimism about reaching a deal with the Republican chairman, Rep. Patrick McHenry, time is running out as the congressional session nears its end. Despite previous efforts to collaborate on stablecoin regulation, a bipartisan agreement has yet to be finalized. The urgency to pass legislation on this issue is becoming increasingly evident.
The hearing also turned into a crypto debate, with Republican members criticizing the Securities and Exchange Commission (SEC) Chair Gary Gensler’s enforcement tactics and overall approach to the industry. Some lawmakers accused the SEC of being a “rogue agency” under Gensler’s leadership, pointing to inconsistencies in defining crypto securities and creating regulatory ambiguity.
Republican Commissioner Hester Peirce expressed concerns about the deliberate ambiguity in the SEC’s approach, noting that it has led to uncertainty among market participants. The agency’s accounting policy, known as Staff Accounting Bulletin No. 121 (SAB 121), has also come under scrutiny from Republican lawmakers who argue that it hinders U.S. banks from engaging with crypto assets due to capital requirements.
Overall, the hearing highlighted the challenges of regulating the rapidly evolving crypto industry and the need for clear, consistent guidelines to protect investors and promote innovation. As lawmakers continue to debate stablecoin legislation and other regulatory measures, finding common ground will be essential to ensuring a balanced and effective regulatory framework.