A bill aimed at regulating stablecoins is facing bipartisan opposition in the House of Representatives Financial Services Committee.
Some lawmakers fear the bill could allow tech bosses like Elon Musk to launch their own stablecoins and dominate the global payments market.
The bill, submitted by Representative Don Beyer, would require stablecoin issuers to obtain a banking contract, comply with federal reserve rules, and obtain approval from the Department of the Treasury and the Federal Deposit Insurance Agency. The bill also aims to prevent stablecoins from being used for illegal activities such as money laundering and terrorist financing.
However, some members argue that the bill is too broad and could hinder innovation and competition in the cryptocurrency industry. They also worry that the bill could give tech giants an unfair advantage with the resources and influence to comply with regulations and enter the stablecoin market.
Representative Maxine Waters, chair of the committee, said she was concerned that the bill could allow Elon Musk's “Twitter X” company to issue its own stablecoin and become a global payments provider.
Waters called it a “scary proposal” and urged his fellow Republicans to reconsider their support for the bill.
Republican Patrick McHenry, the most senior member of the committee, also voiced his reservations about the bill. McHenry said he was concerned the bill could hand over the keys to an unregulated market to Mark Zuckerberg, who is facing charges of contempt of Congress for Facebook's handling of data privacy scandals.
*Not investment advice.