Ranking Member Waters Promotes Stablecoin Legislation As May 10 Deadline Looms

stablecoin optimism – Waters

Speaking to stablecoin legislative momentum in a Bloomberg TV interview last Wednesday, House Financial Services (HFS) Ranking Member Maxine Waters (D, CA) was optimistic saying that “We’re on our way to getting a stablecoin bill in the short run.” Emphasis: short run,  as in soon.

In addition to the close co-ordination with HFS Chair Patrick McHenry, she also mentioned the involvement of Senate Majority Leader Chuck Schumer (D, NY) and Senate Banking Chair Sherrod Brown (D, OH).

what you should know: Her tone was a far cry from the July 2023 stablecoin markup where the Dem leader attempted to put the breaks on the “Clarity for Payment Stablecoins” [H.R.4766] bill on behalf of the White House -and then adding in August 2023 that the bill had “No chance.”

stablecoin optimism – FAA

10 days to go!

FAA Reauthorization is the odds-on-favorite to be the the must-pass that the stablecoin bill rides on – last mentioned publicly by Sens. Cynthia Lummis (R, WY) and Kirsten Gillibrand (D, NY) on CNBC on April 18, who have their own stablecoin bill out there that earns the Senators a “seat” at the stablecoin “table” at the very least.

FAA’s funding runs out on May 10 so there are only 10 days to go until the reauthorization must revisit Congress for a vote. Of course… there will be other must-pass opportunities if the timing doesn’t work. Right?

Nevertheless, Ranking Member Waters seemed resolute in her efforts to get the bill over the finish line in concert with Chair McHenry. She told Bloomberg, “We’ve been working on this for 22 months. We have put together a legislation – with a few more tweaks that we may have to put to it – that I think is going to bring everyone together.”

what you should know: What are the “tweaks”? In addition to Congress, there are a lotta cooks (Fed, White House… the States? SEC? CFTC?) in the kitchen with this bill. Is there still more squabbling over Fed pre-emptive rights on issuance of stablecoins versus a shared authority with states such as New York? Coming soon. Remember… Ranking Member Waters was optimistic on stablecoin law in a March 2023 interview with Yahoo and then abruptly changed her tune 30 days later at an HFS Committee hearing in April 2023, when presumably the Biden Administration told her to reject it. A big difference this time is the Schumer/Brown (Dem leadership) reported openness to the bill.

more stablecoin momentum

Last Thursday, financial technology company Stripe which facilitates billions in retail payments announced that it was going to start offering payments via the Solana, Ethereum and Polygon blockchains  using the USDC stablecoin issued by Circle. Tokenization publication Ledger Insights, which breaks down the offering and compares it to similar products from Visa and PayPal, notes that Stripe will still get its 1% cut using the new stablecoin technology.

what you should know: The stablecoin use case is settlement – take out the middlemen, reduce fees, make it cheaper and faster -and better for consumers. Stripe President John Collison said in a speech, “Crypto is finding real utility…. With transaction speeds increasing and costs coming down, we’re seeing crypto finally making sense as a means of exchange.”

Senate Banking leadership

Analysis: Sherrod Brown just scored a big win in a tough election year with fentanyl act (April 26) – WXVU

what you should know: This article indirectly reveals why Sen. Brown is suddenly open to a stablecoin bill.

new lawsuit

Also last Thursday, blockchain technology firm Consensys announced that it had filed a lawsuit against the Securities and Exchange Commission (SEC) to ensure that Ethereum remains a vibrant and indispensable blockchain platform and the foundation for….” Read more on Consensys website.  Put very simply: Consensys is trying to force the SEC to finally, clearly and publicly declare Ether is a security or a commodity. To date, the best the SEC has done is the long-debated Hinman documents and Gary Gensler’s obfuscation’s at House Financial Services’ oversight hearings.

more tips:

    • SEC sued over Ethereum, crypto firm asks court to state token is not a security – Fortune on Yahoo

what you should know: This lawsuit is looking to pre-empt a Wells Notice (define) received by Consensys from the SEC – also last week. It’s a new trend as the industry and the SEC battle it out: SEC sends Wells Notice, industry sues SEC.

It is believed that the center of the storm for the SEC is Consensys’ Metamask self-hosted wallet that the SEC is calling an unregistered broker-dealer. This latest crypto conflagration with the SEC comes only two weeks after Uniswap received a Wells Notice of its own – apparently for operating an alleged, unregistered exchange.

dissecting dealer rule

Crypto Freedom Alliance of Texas and the Blockchain Association sued the SEC in federal court in the Northern District of Texas in a bid to set aside the SEC’s new dealer rule…” – read the lawsuit breakdown from Cap Hill Crypto’s George Leonardo (April 26).

anti-CBDC co-sponsors

The question among House Republicans may be who isn’t co-sponsoring the Majority Whip Tom Emmer’s (R, MN) “CBDC Anti-Surveillance State Act” [H.R.5403]?

10 more House Republicans were added to the co-sponsor list in the past week bringing the total to 156 House Republican co-sponsors.  If the current Republican caucus is 217 in the House right now, and current trends follow, there are 51 Republicans who still need to sign up.

Senator Ted Cruz’s (R, TX) efforts in the upper house with the same bill remained static in the last week at 9 Republican co-sponsors.

what you should know: Politico’s Morning Money reported on Friday that conservative think tank Heritage Foundation is pressing Republicans to fall in line behind the anti-CBDC bill and that a House Floor vote is expected this summer.

blockchain bill vote

Reps. Larry Buschon (R, IN) and Lisa Blunt Rochester (D, DE) bipartisan bill “Promoting Resilient Supply Chains Act” [H.R.6571] may be moving closer to a House Floor vote.

Congress.gov says that the bill was “placed on the Union Calendar” on Friday.

what you should know: The non-digital-assets blockchain bill enables the Department of Commerce to encourage use of blockchain technology in the United States for supply chain purposes.  Read more from Rep. Buschon from his interview with blockchain tipsheet in February.

DOJ rebutted

“The DOJ’s opposition to Roman Storm’s motions to dismiss and suppress evidence in the Tornado Cash case is filled with technical inaccuracies, obvious disdain for privacy and emerging technology, and misapplication of the law….” – DeFi Education Fund’s Amanda Tuminelli… read her tweet thread on X.

more amicus briefs

“Our disputes with the [SEC] are about much more than just [Coinbase]. They are about about an entire industry and the 52 million Americans that own crypto. Thank you to [John Deaton] (+4,701 Coinbase customers) and [Blockchain Association] for their amicus briefs in support of [Coinbase’s pursuit of an interlocutory appeal to the Second Circuit].” – Paul Grewal, chief legal officer, Coinbase, on X (April 26)

what you should know: Deaton (R) may have produced a brief to support Coinbase, but it also provides another point of published differentiation in his race for the U.S. Senate against incumbent Sen. Elizabeth Warren (D, MA).

still more tips

Talking Progressive Regulators; FDIC Backs off Asset Managers; Ungagging the SEC Gag Rule? (April 27) – Capitol Account

Custodia files appeal after judge rules bank is not entitled to Fed master account (April 26) – The Block

Digital asset reporting: Draft form available from IRS (April 25) – Crowe

RFK Jr.: ‘I’m gonna put the entire US budget on blockchain (April 22) – The Hill

Successful Hong Kong crypto ETF flows would pale in comparison to US funds – Blockworks