Lawmakers in the U.S. House of Representatives are delaying a vote on the measure for at least several weeks, delaying consideration of a bipartisan bill to curb potential risks to so-called stablecoins, according to people familiar with the matter.
The potential deal would be an important first step in imposing stricter regulations on the cryptocurrency industry, which has thrived with virtually no regulation. Biden administration officials and a bipartisan group of lawmakers are concerned that existing laws do not provide comprehensive standards for potential risks to the financial stability of stablecoins, a type of cryptocurrency that is meant to be pegged to the dollar or another national currency.
Lawmakers working on a potential deal between House Financial Services Committee Chairwoman Maxine Waters and the top Republican on the panel, Patrick McHenry, failed to complete work on the bill before a scheduled committee vote on July 27.
That likely delays consideration of the package until at least September, when Congress is expected to return from its summer recess. Spokesmen for Waters and McHenry did not immediately respond to a request for comment.
Lawmakers and their staff spent the weekend trying to resolve remaining policy issues with legislation pushed by top Biden administration officials. As of the morning of July 25, the bill was not complete and at least some key issues remained unresolved.
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Those issues include standards around so-called storage wallets, one of the people said. Treasury officials have pushed through the purse strings that Republicans are worried about, the person said. Treasury officials have helped draft the bill, but have not yet approved it.
Treasury Secretary Janet Yellen praised the ongoing work in a July 22 phone call with Waters but stopped short of endorsing the bill, people familiar with the call said. One of the people said he had to contact the White House, which has not yet made the bill public.
Policymakers are concerned that stablecoins could be vulnerable to mass withdrawals by investors if there are doubts about their ability to continue redeeming their tokens at a one-to-one ratio for official currencies. This could force stablecoin issuers to liquidate their reserves, putting downward pressure on asset prices and potentially damaging the broader financial markets.
But some regulatory officials and bankers were concerned about the speed with which the bill’s supporters planned to vote on the measure in committee. On July 22, the Independent Community Bankers of America, an influential lobbying force on Capitol Hill, urged Waters to delay consideration of the bill, citing the need for input from bankers and other stakeholders.
Officials from the Securities and Exchange Commission and other regulatory agencies have also expressed concerns about the bill.
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This article was published by Dow Jones Newswires, an affiliate of the Dow Jones Group
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