UPDATE: This article reflects the passage of the bills out of committee.
WASHINGTON — After a marathon hearing that ended well into Wednesday evening, House Republicans passed their stablecoin bill, as well as other bank-regulated pieces of legislation, out of the House Financial Services Committee.
While the stablecoin legislation — a priority of this Congress and the White House — has bipartisan support, it faces some Democratic pushback because of President Donald Trump's cryptocurrency ambitions and the potential for those to pose a significant conflict of interest.
The stablecoin bill passed in a 32-17 vote. That bill — along with a de novo banking bill from Rep. Andy Barr, R-Ky., and a piece of legislation to repeal the small-business loan data collection requirements in Dodd-Frank 1071 from Rep. Roger Williams, R-Texas — will now go to the House floor.
The long hearing came on the tail of a hectic week in Congress. Scheduled votes on overturning the Consumer Financial Protection Bureau's overdraft rule and its larger participant rule were pushed back as Republican House leadership canceled votes for the week after a small group of GOP lawmakers joined Democrats in opposing a procedural rule that would have killed a bipartisan effort to allow proxy voting in Congress for new parents.
Many of the amendments in the hearing — particularly those offered early in the session — centered on the Trump family's crypto efforts like the
"What I really wanted was that we could agree that we not pass a bill that legitimizes blatant greed and corruption, and I wanted you to work with me … and I wanted to insert language into the bill that … would prevent the president from using this legislation to unjustly enrich himself," said House Financial Services Committee ranking member Rep. Maxine Waters, D-Calif., to the panel's chairman, Rep. French Hill, R-Ark. "We could not come to an agreement on that."
She also raised issues about the separation of banking and commerce, a
"There is also no separation of banking and commerce in the current bill," Waters said. "Without that separation, commercial companies like Walmart, Amazon, Facebook, X, all could authorize their own stablecoins."
So far, the bill negotiations have been able to garner some Democratic support and cosponsors, which Republicans will need to pass some version of stablecoin legislation in both the House and the Senate. The Senate Banking Committee made a handful of concessions to banks in
That said, some of the Democratic lawmakers cosponsoring the House bill — including Rep. Sam Liccardo, D-Calif. — also offered their own amendments targeting conflicts of interest for government officials.
Republicans said these amendments were unnecessary.
"The underlying bill places universal requirements on issuers of all stripes," said Rep. Bryan Steil, R-Wis., one of the main sponsors of the bill along with committee Chair Hill.
Reps. Stephen Lynch, D-Mass., Sean Casten, D-Ill., and Bill Foster, D-Ill., emerged as leading Democratic negotiators during the marathon markup after ranking member Waters left the hearing room.
One amendment from Lynch would address some bankers' concerns about the legislation, barring crypto exchanges or other stablecoin-affiliated businesses from paying interest or yield to stablecoin holders, widening the bill's prohibition on stablecoin issuers themselves offering interest.
"I'm skeptical of claims that stablecoins issued by non-banks will not compete with bank deposits and undermine the ability of banks to make loans to consumers and Main Street businesses," Lynch said.
Industry reaction to the stablecoin bills moving through Congress has been mixed.
The Conference of State Bank Supervisors, an organization representing state bank regulators across the country, said the group has "serious concerns" about the legislation.
"As currently drafted, the [House bill] would effectively centralize power over a nascent industry in a single federal agency," said Brad Milhorn, president and CEO of the group, in a letter to the House committee. "This approach would undermine the strategic advantage of cooperative federalism that has enabled American innovation for centuries and positioned the United States as the world leader in financial services."
The American Bankers Association in a statement for the record to the committee applauded the inclusion of preventing payment of interest on stablecoins and for confirming that the bill's intent isn't to change eligibility for Federal Reserve master accounts.
The group did highlight continued concern with the blurring of banking and commerce.
"Non-financial commercial companies should be prohibited from owning or controlling payment stablecoin issuers," ABA said in the statement. "This separation of commerce and payment stablecoin issuance is critical to avoid conflicts of interest and concentration of economic power."
