How the House Financial Services Committee's Markup of the Stablecoin Legislation Went Off the Rails

TL;DR Today not long after they started at 9:00 AM EST this morning the Financial Services Committee markup of two stablecoin bills has gone completely off the rails. We have had what can only be described as a kangaroo court by one side emerge with the Chairman trying to maintain order while there have been lies and blatantly incorrect information sprouted. Almost 12 hours later the hearing is still going on.

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I want to first note that this hearing is currently still going on as of 8:50 PM EST. After yesterday successfully moving the Financial Innovation and Technology for the 21st Century Act in a bipartisan manner (much to the surprise of many reporters and followers of politics) the idea of legislation moving smoothly again was not out of the world of possibilities. It turned out that this could not have been further from the truth.

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This markup was headlined by two crypto stablecoin bills H.R. 4766, the "Clarity for Payment Stablecoins Act of 2023" and HR 4841, the "Keep Your Coins Act of 2023". These bills had previously been slated to be on yesterday's markup however on Tuesday Chairman McHenry announced they would be pushed back a day because a bipartisan agreement was close to coming together. This was great news and something I think people really believed was going to happen after how the Financial Innovation and Technology for the 21st Century Act moved just a day earlier.

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Almost from the start of the 9:00 AM EST hearing things started to spiral out of control. During opening remarks, Chairman McHenry announced that there had been an agreement in place but in the 11th hour last night, it fell apart due to pressure from the White House. Now this honestly is not the first time we have heard this happen as last July stablecoin legislation was supposed to be introduced and move forward until Treasury Secretary Yellen herself tanked the whole thing. Some might think that this comment is inappropriate but it really did a good job framing what happened and what ended up happening just minutes later.

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Ranking Member and Former Chairwomen Maxine Water spoke next starting right off the bat with "Today this committee is being forced by the extreme MAGA wing of the Republican party to address a trove of anti-ESG, anti-investor and wholly anti-capitalist bills" immediately starting off a shouting match because of how this broke the Rules of Order and Decorum. What is so absolutely wild about this statement is how the two crypto bills limited government interference, allowed states to set their own standards, and put investors and the markets in charge. Somehow that has now become anti-investor and anti-capitalist but I digress.

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After the Democrats moved to have the stablecoin legislation not be considered (it is done by a simple majority so it easily failed) the Democrats moved to a new strategy of saying that this legislation was moving too quickly and that Democrats were not given the time to draft and propose amendments. Mind you negotiations of this bill became public knowledge roughly a year ago and prior to that had been worked on within the Committee between the two sides since roughly March 2022 so there has been plenty of time. The version that was also being voted on was introduced in June and had circulated for a couple of weeks before that so again that comment is just not true.

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Fast forward roughly an hour into the hearing Ranking Member Waters asked to be recognized which Chairman McHenry immediately did. It was here that the hearing really showed its Kangaroo Court face with Ranking Member Waters turning to Chair McHenry getting inches away from his face and yelling at him how he was not following the rules. When he informed her that the parals (they are special lawyers whose whole job is making sure things follow the rules) had told him and his staff that this was the correct way to run the hearing. In a bizarre move, she started to refer to HERSELF as Chair and demanded evidence immediately.

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As someone who works on a Committee, my jaw hit the floor because you just do not see this ever happen. The title of Chair is extremely prestigious and respected on the Hill you never see one Member who is in the minority start referring to themselves as Chair. When she started to demand evidence and went down that path while it might make sense to the public she threw her entire Committee staff under the bus and embarrassed them. They would have been involved with making sure this was cleared by the parals so having your Member start loving that type of grenade only blows up on yourself esp. in front of your colleagues.

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Several times Chairman McHenry has had to stop whoever was talking and ask Members of both sides to respect each other and quiet down. He has even been giving those interrupted Members their whole 5 minutes back to start over something that is not often done.

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On social media, there have been comments made by those involved with the stablecoin negotiations that what Chairman McHenry has said is the truth. The Head of Policy at the Chamber of Digital Commerce tweeted that what McHenry said in his opening statement is exactly what had happened.