White House Derailed Negotiation on U.S. House Stablecoin Bill: McHenry

House lawmakers have failed to reach a bipartisan deal on stablecoins legislation, with Financial Services Committee Chair Patrick McHenry (R-N.C.) blaming White House intransigence for the stalemate while the panel’s top Democrat said it was McHenry who shut down the talks.

The news comes a day after the finance-focused lawmakers advanced three bills on crypto issues to a vote in the full House of Representatives, the first time they advanced laws fully dedicated to the topic.

“Today I had hoped to announce an agreement with the ranking member on stablecoins legislation,” McHenry said, referring to the committee’s senior Democrat, Maxine Waters (D-Calif.). “This will not be the case… It was the White House’s unwillingness to compromise that has once again brought that negotiation to a halt.”

McHenry said he was “disappointed” but did not explain the details of the disagreement with the executive branch.

Waters said the bill was “deeply problematic and bad for America,” and that it “promotes a race to the bottom by creating 58 different licenses,” allowing issuers to potentially include a wide range of assets in their reserve and allowing large corporations such as Meta or Walmart to issue money.

“I urge Republicans to pull this extremist piece of legislation from the markup and your culture wars,” Waters added, citing the lack of oversight from the Federal Reserve and lack of provisions on diversity and inclusion.

A Thursday markup of the Republicans’ stablecoin bill was highly contentious, with Republicans pushing forward and Democrats dragging their feet on every procedural point. Because such legislation likely needs bipartisan support to advance in the Senate, the effort in the committee to openly negotiate the bill’s details underlines the ongoing stalemate for U.S. stablecoin oversight.

A White House spokesperson did not immediately respond to a request for comment. Waters said neither the Fed nor the U.S. Treasury Department support the bill as it stands.

The Clarity for Payment Stablecoins Act was introduced by McHenry (R-N.C.) last week, and seeks to offer a regulatory framework for crypto tied to the value of fiat.

McHenry has previously warned that rival jurisdictions are “ahead of the game” on regulating crypto, with the European Union’s markets in Crypto Assets regulation (MiCA) set to take effect in 2024.

Last week CoinDesk reported that a bipartisan grouping of Senators is pondering a rival bill that would put stringent anti-money laundering (AML) requirements on decentralized finance (DeFi) protocols, in effect treating them like banks.