Partisan Impasse Suggests Small Chance for Stablecoin Statutory Change

Today’s HFSC hearing on stablecoins makes it clear that the bipartisan legislation Chairwoman Waters (D-CA) prefers is at best a long way off.  Democrats generally agreed with the President’s Working Group stablecoin report (see Client Report CRYPTO21), with Under-Secretary Liang today not only describing its findings but reinforcing the need for rapid regulatory intervention in concert with substantive statutory change.  While Republicans acknowledged stablecoin’s possible risks, they also believe that private issuers should not be forced into federal charters, that state standards suffice, that run-risk poses little systemic risk, and that CBDC will be able to coexist with stablecoins.