The leader of the powerful U.S. House Financial Services Committee has accused the Biden White House of hindering a bipartisan agreement on stablecoin regulations. Rep. Patrick McHenry, a North Carolina Republican, expressed his disappointment during a markup session of stablecoin legislation. He had hoped to announce a deal with the ranking Democrat on the committee, Rep. Maxine Waters of California, but they failed to reach an agreement due to what he described as a lack of “urgency” from the White House.
McHenry emphasized that the ranking member and her staff negotiated in good faith for over a year, and he placed no blame on them for the lack of progress. He believed that a bipartisan deal was within reach and stated, “It was the White House’s unwillingness to compromise that once again brought negotiations to a halt.”
The Biden administration has been actively engaged in negotiations with Congress concerning stablecoins, which are a type of cryptocurrency designed to maintain a stable value relative to the US dollar. They are frequently used by crypto traders to hold funds not invested in other digital assets, and there are predictions that stablecoins will become increasingly popular as a means of online payment.
Prominent stablecoins such as Tether (USDT) and USD coin (USDC) assert that they are backed one-to-one with liquid assets, allowing users to redeem their stablecoins for US currency at any time.
In 2021, a White House financial-markets advisory group chaired by Treasury Secretary Janet Yellen issued a report recommending that only insured banks overseen by federal regulators be permitted to issue stablecoins. The report expressed concerns about the potential for a run on stablecoin assets and their potential use in money laundering or financing illicit activities.