A group of United States lawmakers have written to the US Federal Reserve Chair Jerome Powell over the central bank’s programs that could harm the Congress’s efforts to establish a payment stablecoin regulatory regime. The Fed’s actins could push financial institutions from participating in the digital asset ecosystem, the lawmakers said.
US Fed Alerted On Payment Stablecoins
In a letter to the US SEC, Patrick McHenry, the Chairman of the House Financial Services Committee, along with two others, stated that there was a need to provide regulatory certainty for payment stablecoins and the broader crypto market. McHenry has long been a pro-crypto lawmaker with special focus on regulation of payment stablecoins.
According to the letter, which was cosigned by lawmakers French Hill and Bill Huizenga, the Fed’s recent supervision and regulation letters named ‘Creation of Novel Activities Supervision Program’ and ‘Supervisory Nonobjection Process for State Member Banks Seeking to Engage in Certain Activities Involving Dollar Tokens’ came in the way of the Congress’ efforts to bring in a payment stablecoin regulatory regime.
The lawmakers effectively allege that the Fed programs are designed to impose new regulatory burdens on banking institutions to engage with crypto assets and to provide the Fed with additional tools to deny crypto related activities. They also raised a question on the role of state banking regulator in permitting the payment stablecoin activities.
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The Stablecoin Bill
Earlier, the the House Financial Services Committee had cleared the Clarity for Payments Stablecoin bill. The bill seeks to create a thorough legal framework for stablecoins.
