Neither the House of Representatives nor the Senate will pass a crypto regulation bill before the elections next month. That’s a pretty safe prediction, given that neither chamber will be in session again before Election Day on Nov. 8.
And after that, if either chamber flips from Democratic to Republican control almost nothing will get done before the new Congress is seated and in control. But either way, something as weighty as regulation of cryptocurrency is virtually impossible and even a far simpler stablecoin regulatory act is very unlikely unless it is attached to the spending bill that must be passed before the current one expires on Dec. 16.
Particularly as the two legislators doing most of the negotiation on the stablecoin bill, House Financial Services Committee Chairwoman Maxine Waters (D-Calif.) and top Republican Patrick McHenry (R-N.C.), couldn’t agree on several issues, most notably of state versus federal control over what institutions would be allowed to issue the reserve-backed, dollar-pegged digital currencies.
That’s despite on-again, off-again news that a deal is near that ran from July through late September — and the immense pressure to do something about stablecoins in the wake of the $48 billion TerraUSD stablecoin’s implosion in May, which dramatically upped concerns about stablecoins’ ability to impact the broader financial as their use becomes more widespread.
Indeed, on Oct. 3, the Federal Reserve Bank of New York suggested in a report on “The Financial Stability Implications of Digital Assets” that even well-backed and resilient stablecoins like USD Coin could increase the run risk of more shaky stablecoins as they are easy to run to.
