Republican Trio Voices Concerns on Fed's Influence on Stablecoin Regulation
Three Republican lawmakers have lashed out at the Federal Reserve regarding its recent moves to strengthen oversight of banks' cryptocurrency and stablecoin activities.
In a Monday letter to Fed Chair Jerome Powell, the lawmakers argued that these actions are undermining their efforts to pass a bill aimed at regulating stablecoins.
The trio, which included House Financial Services Committee Chair Patrick T. McHenry (R-N.C.), Rep. Bill Huizenga (R-Mich.), and Rep. French Hill (R-Ark.), said the Fed's actions effectively prevent banks from issuing payment stablecoins.
"We are concerned that these actions are being taken to subvert progress made by Congress to establish a payment stablecoin regulatory regime," they wrote.
"Moreover, if these letters are left in place, they will undoubtedly deter financial institutions from participating in the digital asset ecosystem."
The Federal Reserve recently issued a letter, SR 23-8, outlining requirements for supervised state banks wishing to engage in stablecoin activities.
The central bank said that banks must have specific controls in place and obtain a "written notification of supervisory nonobjection from the Federal Reserve" before proceeding with stablecoin activities.
The Federal Reserve has also launched the "Novel Activities Supervision Program" (SR 23-7), which is intended to enhance its oversight of banking organizations engaged in crypto, distributed ledger technology, and technology-driven partnerships with nonbanks.
"While the supervisory non objection process is masked as guidance outlining a process by which these activities can be permissible, it is clear the Fed does not intend to allow any such activity, at least as it relates to public, permissionless blockchains,"
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