Congress is in Recess but Members are Staying in the News Over Stablecoins

TL;DR Over the last few days and today in particular comments have been made about stablecoins with PayPal getting the main focus. This area of legislation was addressed at the end of July in the House Financial Services Committee with a BIPARTISAN bill passing through the Committee to the House Floor for a full House Vote. Ranking Member Waters who has made all the noise refused to budge during negotiations and Republicans ended up reaching out and making deals with a variety of other Democrats on the Committee addressing their concerns to get stablecoin regulation addressed.

​

​

​

​

​

​

I am not going to lie I thought that August Recess, when both chambers of Congress go back to their districts/states for 6 weeks, would be light on crypto. After all, we ended July with an absolute BANG legislation-wise as four bills passed out of House Committees to be voted on by the entire House. Crypto though does not rest and that has been seen on several fronts the most important of which in Congress's eyes is the PayPal news about their new Stablecoin they back.

​

The most ironic thing about PayPal's announcement is that Stablecoin legislation was actually one of the four bills and passed out of the House Financial Services Committee. Today Ranking Member Maxine Water made big waves with her statements of being "deeply concerned" by PayPals development and deployment of a USD stablecoin. See stablecoin legislation has been something that the House Financial Services Committee was working on for a YEAR while Rep. Waters was in charge and at the end of it the Committee she led did not introduce or pass anything about it.

​

When the calendar flipped and the 118th Congress started Rep. Waters became Ranking Member while Rep. Patrick McHenry took over the helm of the Committee. Unlike his predecessor Chairman McHenry made it known and held hearings over this legislation seeking input from stakeholders, regulators, and the public. Chair McHenry prioritized this and cryptocurrency clarity is actually a Republican pillar this Congress. How that will work out is yet to be known but it is something that they want to accomplish.

​

The most important part of this though was that while the Ranking Member urged her party to vote against it this bill (H.R. 4766) passed with bipartisan support! That is huge and something that highlights how both parties are wanting to provide this clarity and essentially the House support coming from both Republicans and Democrats can leverage this support against the Senate to get them to come to the table for negotiations if they will not pass the House bill. It also shows the Administration that a veto would not be in their best interest due to the bipartisan support.

​

All of this needs to be taken into consideration when reading Ranking Member Water's comments. In the markup hearing, she tore into Chair McHenry and if you watch the hearing it became pretty embarrassing as she tried to recognize and reclaim time as "the chairman" which was not the case. What it boiled down to sadly at the end, which has been confirmed by both comments Members on both sides have made along with my friends, is that Rep. Waters did not like the bill and wanted it sunk. She wanted the Treasury Department to gain significant control over this area of regulation something that they currently don't have along with the Fed gaining additional powers.

​

Her own party did not like this hence the fragmentation during the votes and subsequent bipartisan support Chairman McHenry's bill gained.