Key US Lawmaker Says Talks Continue Over ‘Ugly Baby’ Bill to Oversee Stablecoins

After months negotiating legislation to establish U.S. oversight, Rep. Patrick McHenry signals the challenges ahead for the effort next year.

AccessTimeIconOct 12, 2022 at 7:54 p.m. UTC
Updated Oct 12, 2022 at 8:30 p.m. UTC

U.S. Rep. Patrick McHenry (R-N.C.) – one side of the negotiations over Congress’ leading stablecoin bill – says the bipartisan talks are ongoing and that he hopes lawmakers can still settle on final legislation in the “coming months.”

The three-way talks with Rep. Maxine Waters (D-Calif.), the chairwoman of the House Financial Services Committee, and the Treasury Department have run into a number of sticking points, according to McHenry, the committee’s senior Republican. But he said Wednesday he’s hopeful the talks will end with a law that would establish rules for how stablecoins – tokens such as Tether’s USDT and Circle Internet Financial’s USDC that are tied to steady assets such as the dollar – can operate in the U.S.

Such a bill would mark the first significant U.S. crypto oversight measure.

So far, the points the House members have had trouble agreeing on including how assets are held, the definition of a crypto wallet and which federal agency might regulate stablecoin issuers. But their common ground includes an agreement to require issuers to have one-to-one reserves backing the tokens, which are often used to buy and sell more volatile cryptocurrencies.

“We agree on all the components of what the asset is,” McHenry said at DC Fintech Week. “We’ve come up with a pretty ugly baby. It is a baby, nonetheless.”

McHenry, who could take over the committee as chairman next year if Republicans win a majority in the House of Representatives, said it has already been “a sign of hope that you can have complex, difficult policymaking in the midst of all this chaos.”

“I’m optimistic that we will come to terms, and I appreciate the trade-offs that my Democratic counterparts were willing to make,” he said.


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Jesse Hamilton

Jesse Hamilton is CoinDesk's deputy managing editor for global policy and regulation. He doesn't hold any crypto.