According to sources familiar with this matter, a key regulatory panel will delay consideration for a broad stablecoin regulation legislation for several weeks due to opposition from the banking industry and late adjustments to certain provisions.
The panel will likely not consider compromise legislation that has been drafted by Democratic leaders and Republican members of the U.S House Financial Services Committee until September because efforts to advance the measure prior to the August congressional break have failed.
According to one source, part of the delay can be attributed to U.S. Treasury Department changes. Although generally supportive of the bill, they wanted stronger consumer protections tied into wallets where people would store their digital assets.
The banks were also wary that Congress would quickly move on a bill with such technical language, as lawmakers try to put guardrails around the rapidly expanding and unregulated cryptocurrency industry.
Representative Patrick McHenry and Maxine Waters, Chairwoman of the top Republican committee, were not available for comment.
The Independent Community Bankers of America (ICBA), a group representing the Independent Community Bankers of America, wrote Friday to the leaders of the committee urging them not to consider a stablecoin bill. They warned that the draft bill may not adequately protect the financial system and should be further studied.
Draft bill envisages bank-like regulation of stablecoin issuers, including supervision and requirements for capital, liquidity, and supervision. Nonbanks could issue stablecoins under Federal Reserve supervision. However, the ICBA cautioned in a letter that the Fed is not equipped to properly police these companies.