Leading Republican House Financial Services Committee members have voiced deep concerns over recent actions taken by the Federal Reserve Board (Fed) that they believe undermine the progress made by Congress in establishing a regulatory framework for payment stablecoin.
In a letter addressed to Fed Chairman Jerome Powell, Representative Patrick McHenry, Representative French Hill, and Representative Bill Huizenga, they criticized the Fed’s issuance of supervision and regulation letters, expressing fears that such actions could deter financial institutions from participating in the digital asset ecosystem.
GOP Leaders Accuse Fed Of Undermining Stablecoin Regulatory Progress
The House Financial Services Committee had previously advanced a comprehensive regulatory framework for stablecoins in the United States. However, the bill’s prospects of becoming law were doubted after negotiations between congressional Democrats, Republicans, and the White House broke down last week.
The lawmakers highlighted their understanding of the necessity for regulatory certainty in the payment stablecoin sector and the broader digital asset ecosystem to protect consumers and provide confidence to market participants.
They emphasized that this recognition resulted from the Clarity for Payment Stablecoins Act, which received favorable bipartisan support from the House Committee on Financial Services.
Despite the Committee’s proactive approach, the Fed’s release of supervision and regulation letters, known as SR 23-7 and SR 23-8, has raised concerns among the Republican lawmakers.
According to the letter, SR 23-7 and SR 23-8 appear to contradict the Committee’s efforts by effectively preventing banks under the Fed’s purview from issuing payment stablecoins or engaging in the payment stablecoin ecosystem.
Controversial Fed Actions Exposed?
While the Fed’s supervisory no-objection process is presented as guidance outlining permissible activities, the lawmakers argue that the Fed intends to prohibit any such activities, particularly those related to public, permissionless blockchains. The letter includes:
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Author: Ronaldo MarquezDid you like this?
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