House abandons stablecoin legislation as Yellen raises concerns over a crucial provision

This week's markup of a highly anticipated bipartisan stablecoin measure in the House Financial Services Committee has been postponed after Treasury Secretary Janet Yellen asked for revisions to a crucial element of the legislation.



According to numerous people involved with the discussions, the delay will cause Congress's ability to start pursuing stablecoin legislation to be postponed until after the August recess. The action highlights Washington's difficulty to establish new regulations for the markets for digital assets, which have been turbulent due to uncertainties following the failure of numerous multibillion-dollar cryptocurrency businesses.


Maxine Waters, the committee chairwoman from California, and Patrick McHenry, the ranking Republican from North Carolina, have been negotiating a bill that would allow banks to create their own stablecoins, which are digital assets whose value is tied to fiat currencies like the dollar, and subject nonbank issuers to the Federal Reserve's regulation.


Despite the draught text's general secrecy, watchdog organisations and banking lobbyists have expressed concern about the framework's specifics, warning that it might not adequately safeguard the financial system. The Independent Community Bankers of America urged Waters and McHenry in a letter late last week to postpone the July 27 markup.


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