Republican Representatives claim the Federal Reserve is undermining Congress’s efforts to regulate stablecoins, potentially deterring banks from entering the digital asset space.
Three Republican lawmakers—Representatives French Hill, Bill Huizenga, and Patrick T. McHenry—have written to Federal Reserve Chair Jerome Powell, accusing the central bank of hindering Congress’s efforts to regulate stablecoins.
The trio claims that the Federal Reserve’s recent supervisory letters could dissuade banks from engaging with digital assets. These letters were issued shortly after the House Committee on Financial Services unanimously approved the Clarity for Payment Stablecoins Act, which aims to provide a clear regulatory framework for stablecoins.
The lawmakers argue that the timing of the Federal Reserve’s actions undermines collaborative efforts with Congress. They contend that these moves serve as an implicit ban on banks participating in the stablecoin market.
Additionally, they point out that the Federal Reserve did not follow the Administrative Procedure Act’s notice and comment procedure, which allows for stakeholder and public input.
In light of these issues, lawmakers have asked the Federal Reserve for clarifications on its stance toward stablecoin regulations.
They have requested a response by September 29. The Federal Reserve, in turn, has acknowledged the letter and intends to reply.