A group of Republican House leaders are voicing their objections to the Federal Reserve related to the establishment of a regulatory framework for payment stablecoins.
The lawmakers, led by Rep. Patrick McHenry (R-NC), chair of the House Financial Services Committee, sent a letter to Fed Chair Jerome Powell, stating their opposition to what they called efforts by the Fed to undermine progress by Congress on legislation to establish a regulatory framework for payment stablecoins. They make this determination based on recent supervision and regulation letters from the Fed.
“We are writing to express concerns regarding the Federal Reserve Board’s recent supervision and regulation letters titled ‘Creation of Novel Activities Supervision Program’ (‘SR 23-7’) and ‘Supervisory Nonobjection Process for State Member Banks Seeking to Engage in Certain Activities Involving Dollar Tokens’ (‘SR 23-8’), both of which were issued on August 8, 2023. We are concerned that these actions are being taken to subvert progress made by Congress to establish a payment stablecoin regulatory regime. Moreover, if these letters are left in place, they will undoubtedly deter financial institutions from participating in the digital asset ecosystem,” the lawmakers wrote.
Along with McHenry, the letter was signed by U.S. Reps. French Hill (R-AR), chair of the Digital Assets, Financial Technology and Inclusion Subcommittee, and Bill Huizenga (R-MI), chair of the House Oversight and Investigations Subcommittee.
“Congress understands the need to provide regulatory certainty for payment stablecoins and the broader digital asset ecosystem. A regulatory framework established by Congress will better protect consumers and provide certainty to market participants. This recognition was the impetus for the Clarity for Payment Stablecoins Act, a bill that was favorably reported by the House Committee on Financial Services on a bipartisan basis. Yet, instead of working with Congress to establish a workable regime, less than two weeks after the Committee’s action, the Fed released SR 23-7 and SR 23-8,” they added.
To better understand the Fed’s rationale and intentions, the lawmakers asked Powell to provide answers to a series of related questions by Sept. 29.