{"id":41963,"date":"2023-07-29T10:05:07","date_gmt":"2023-07-29T14:05:07","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/dems-give-fed-veto-power-over-crypto-bills-rep-torres-says\/"},"modified":"2023-07-29T10:05:09","modified_gmt":"2023-07-29T14:05:09","slug":"dems-give-fed-veto-power-over-crypto-bills-rep-torres-says","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=41963","title":{"rendered":"Dems give Fed \u2018veto power\u2019 over crypto bills, Rep. Torres says"},"content":{"rendered":"
\n

Unlike other areas of crypto policy, Democrats and Republicans agree on the need for stablecoin legislation, but according to Democratic Rep. Ritchie Torres of New York, it\u2019s his party\u2019s excessive deference to the White House and financial regulators that has prevented a compromise.<\/p>\n

Hopes for a broad, bipartisan compromise on legislation regulating stablecoins were dashed Thursday after negotiations between Democrats and Republicans on the House Financial Services Committee broke down in dramatic fashion. <\/p>\n

\n

The stablecoin bill, which would have created minimum standards for stablecoin reserves, mandated monthly disclosure reports and set rules on how customers could redeem dollars for coins had been the subject of bipartisan negotiations ever since the White House called for Congress to regulate them in the fall of 2021.<\/p>\n

A stablecoin is a type of cryptocurrency that seeks to maintain a one-to-one relationship with the U.S. dollar
\n DXY,
\n -0.07%<\/bg-quote>,<\/span>
\n and is currently used by crypto traders to park uninvested funds. <\/p>\n

Crypto companies like Circle, the issuer of USD Coin
\n USDCUSD,
\n -0.01%<\/bg-quote>,<\/span>
\n believe that they will soon become a widespread means for making payments over the internet. Other popular stablecoins include Tether
\n USDTUSD,
\n 0.00<\/bg-quote>
\n and Dai
\n DAIUSD,
\n +0.02%<\/bg-quote>.<\/span>\n <\/p>\n

Federal Reserve Vice Chair for Supervision Michael Barr worked to convince the ranking Democrat on the committee, Rep. Maxine Waters of California to marshall votes against the bill, because it would give state-based financial regulators too much freedom in overseeing stablecoin issuance.<\/p>\n

\u201cIf it weren\u2019t for Michael Barr, we would have had a much broader compromise on stablecoin legislation,\u201d Torres told MarketWatch. \u201cMr. Barr was insistent on federal preemption of the states, which was a nonstarter for the New York delegation because we have faith in the New York Department of Financial Services,\u201d which regulates stablecoin issuance in that state.<\/p>\n

\u201cI cannot for the life of me understand why we should give veto power to regulators over bipartisan regulation and compromise,\u201d he added.<\/p>\n

The Federal Reserve declined a request to comment.<\/p>\n

Rep. Patrick McHenry of North Carolina said that the White House was also to blame for preventing a compromise. <\/p>\n

\u201cA bipartisan deal was within reach, we were closer than we\u2019ve ever been,\u201d the Republican Chairman of the House Financial Services Committee said. \u201cIt was the White House\u2019s unwillingness to compromise that once again brought negotiations to a halt.\u201d<\/p>\n

The White House didn\u2019t respond to requests for comment.<\/p>\n

Led by Rep. Waters, opponents of the bill used procedural tactics to attempt to prevent its passage, including walking out of the hearing in an effort to block a quorum. <\/p>\n

She criticized the bill as one that would create a regulatory \u201crace to the bottom\u201d by allowing different states to issue stablecoin licenses and for not including a ban on commercial entities from issuing a stablecoin. <\/p>\n

\u201cUnder this framework, Amazon
\n AMZN,
\n +3.09%<\/bg-quote>,<\/span>
\n Walmart
\n WMT,
\n +0.47%<\/bg-quote>
\n or Facebook
\n META,
\n +4.42%<\/bg-quote>
\n can create their own\u00a0stablecoins, or even be affiliated with a\u00a0stablecoin\u00a0issuer,\u201d she said.<\/p>\n

Read more<\/strong>: Bipartisan fears of an Elon Musk stablecoin cloud crypto legislative debate<\/p>\n

Without broad, bipartisan support for the measure, it\u2019s unlikely to garner any support in the Senate according to Owen Tedford, policy analyst at Beacon Policy Advisors. <\/p>\n

\u201cThe upper chamber has not progressed as far in conversations around crypto market structure or stablecoins and has\u00a0spent more time\u00a0focused on creating regulations to minimize potential illicit uses of digital assets,\u201d he wrote in a Friday note to clients. <\/p>\n

\u201cNew rules for crypto are on the mind in Congress, but the House and Senate are moving in different directions,\u201d he added.<\/p>\n

Rep. Torres says that the stablecoin debate dynamics are reflective of his party\u2019s submissive stance toward financial regulators that could hobble policymaking going forward. <\/p>\n

\u201cThere is a culture of excessive deference to regulators,\u201d he said of his Democratic colleagues. \u201cWe should restore the centrality of Congress to lawmaking in America.\u201d<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Unlike other areas of crypto policy, Democrats and Republicans agree on the need for stablecoin legislation, but according to Democratic Rep. Ritchie Torres of New York, it\u2019s his party\u2019s excessive deference to the White House and financial regulators that has prevented a compromise. Hopes for a broad, bipartisan compromise on legislation regulating stablecoins were dashed […]<\/p>\n","protected":false},"author":1,"featured_media":41964,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-41963","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nDems give Fed \u2018veto power\u2019 over crypto bills, Rep. 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