- Senator Elizabeth Warren has expressed opposition to the creation of stablecoin regulations.
- Warren’s sentiments have attracted backlash from Blockchain Association.
- The U.S. senator’s opposition comes as Congress looks set to consider a stablecoin bill advanced by the House Financial Services Committee in 2023.
The path to achieving regulatory clarity for the crypto industry in the U.S. remains rife with opposition.
In 2023, the House Financial Services Committee advanced a stablecoin regulatory framework for the consideration of the House of Representatives, stirring hopes of near stablecoin regulations. With Congress set to return this week, however, these hopes now face a challenge.
Notorious crypto skeptic U.S. Senator Elizabeth Warren has penned a letter to the House Financial Services Committee about plans to push the stablecoin bill. This letter has triggered a wave of backlash from crypto advocates.
Warren Slammed for “Backwards Thinking”
In a Monday, April 8, letter to the House Financial Services Committee that has circulated on crypto Twitter, Warren expressed concerns that efforts to create new regulations around stablecoins like the committee’s The Clarity for Payment Stablecoins Act could “entrench…risks rather than mitigate them.”
Reiterating long-held views, Warren argued that stablecoins posed consumer, banking, and national security risks. These views stem from concerns that stablecoin de-pegging fears could trigger bank runs and disputed claims about using these assets in terrorism financing.
Warren’s sentiments have unsurprisingly attracted pushback from crypto advocates. In a thread on X on Tuesday, April 9, Blockchain Association accused the U.S. senator of “backwards thinking.” Contrary to Warren’s claims, the crypto advocacy group stressed that well-thought-out regulations “helps, not hurts.”
Blockchain Association supported their views by citing comments from Treasury Secretary Janet Yellen and Fed Chair Jerome Powell, all of whom called for stablecoin regulations to mitigate the risks highlighted by Warren.
"We encourage Congress to act on stablecoin legislation to cement the US dollar’s primacy around the world and ensure homegrown, responsible digital asset innovation flourishes," the group surmised.
What You Need to Know About The Clarity for Payment Stablecoins Act
Spearheaded by House Financial Services Committee Chair Rep. Patrick McHenry, The Clarity for Payment Stablecoins Act aims to offer regulatory clarity and oversight for stablecoins. To this end, the bill sets up licensing requirements for issuers, mandating registration with the Office of the Comptroller of the Currency (OCC) or the Federal Reserve, with which they would have to file regular reports for transparency and supervision.
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To further ensure consumer protections, the bill mandates stablecoin issuers to hold full and liquid reserves and disclose all relevant information about these reserves and potential risks.
Beyond consumer protections, the bill also includes provisions for robust Know Your Customer (KYC) and anti-money laundering (AML) requirements to curtail bad actors’ use of these assets.
Despite the bill’s potential benefits, even in the House Financial Services Committee, Democrats gave the bill significant pushback, only advancing with a 34-16 vote.
On the Flipside
- Senators Cynthia Lummis and Kirsten Gillibrand have unveiled plans to introduce a separate stablecoin bill in the Senate.
- In 2023, the 27-member state EU approved regulations for stablecoins and crypto exchanges.
Why This Matters
The Clarity for Payment Stablecoins Act offered hope for establishing stablecoin regulations in the U.S. soon. Senator Warren’s sentiments, however, suggest that the bill’s path may be rife with roadblocks.
Read this for more on the U.S. stablecoin bill:
US House’s Stablecoin Regulation Bill Passes Despite Bipartisan Tension
See this to learn more about Bitcoin’s recent price action:
Bitcoin Is Back Below $70K: Is $80K Still in Play?
