Proposed stablecoin legislation is unlikely to be tacked onto the must-pass Federal Aviation Administration’s (FAA) reauthorization bill despite attempts by Representatives Maxine Waters and Patrick McHenry, a Democratic aide on Capitol Hill revealed Tuesday.
Stablecoin Legislation Merger With FAA Reauthorization Unlikely
Speaking with CoinDesk, the anonymous staffer claimed that leaders in both the Senate and the House of Representatives are not keen on adding legislation dealing with stablecoins onto the staple FAA bill. U.S. lawmakers typically pass less popular legislation to larger bills almost guaranteed to pass in hopes of drumming up bipartisan support for their cause.
JUST IN: Congressional leaders block stablecoin regulations from tagging along with FAA bill. Efforts for U.S. #Stablecoin rules hit another snag. #Crypto legislation on hold once more.
— THΞ FΞNNΞC (@FennecSpirit) April 30, 2024
Punchbowl News reported earlier this month on Representatives Maxine Waters and Patrick McHenry’s attempts to pitch Senate Majority Leader Chuck Schumer their proposed combined stablecoin and FAA package.
The political publication noted that the merged legislation would be “fairly unprecedented in financial services policy.”
Patrick McHenry And Maxine Waters Push For Stablecoin Bill
Introduced in 2023, McHenry’s “Clarity for Payment Stablecoins Act” would see stablecoins regulated similarly to the traditional financial sector.
The House Financial Services Committee Chair’s bill is not the only proposed stablecoin policy making rounds in Washington, D.C.
Earlier this month, Senators Cyntia Lummis and Kirsten Gillibrand brought forward the Lummis-Gillibrand Payment Stablecoin Act, which would allow federal and state depository institutions to become stablecoin issuers while non-depository institutions would be overseen by the federal government while preserving state-level regulation.
🚨@gillibrandny and I are introducing the most comprehensive stablecoin bill to date.
Crypto assets are revolutionizing the world and as the undisputed leader in financial innovation, the U.S. must embrace crypto assets, but it cannot be done without clear rules for stablecoins. pic.twitter.com/vwRUEBUdsl
— Senator Cynthia Lummis (@SenLummis) April 17, 2024
“The bipartisan Lummis-Gillibrand Payment Stablecoin Act preserves the dual banking system and gives both federal and state agencies roles in chartering and enforcement,” Gillibrand said in a statement announcing the legislation. “It protects consumers by mandating one-to-one reserves, prohibiting algorithmic stablecoins, and requiring stablecoin issuers to comply with U.S. anti-money laundering and sanctions rules.”
Senator Elizabeth Warren has been particularly concerned about anti-money laundering (AML) concerns surrounding stablecoins. Since she first proposed the Digital Assets Anti-Money Laundering Act (DAAMLA) in 2022, she has gathered bipartisan support for it.
“If we are going to create new on ramps, increasing traffic, which is exactly what the House bill does, then we need a regulatory framework that will put the rules for Anti-Money Laundering in place so that we do not have more opportunities for Iran and terrorists and drug lords and human traffickers to make more money,” Warren said in a recent hearing.
While it is currently unclear when or if U.S. lawmakers will be able to advance a stablecoin bill through Congress, reports that crypto legislation will not be added to the FAA legislation may greatly decrease its chances of being approved at all.
