Rep. Patrick McHenry and others are concerned that the Fed’s new rule, which requires written permission, could make banks completely stop getting involved in building digital currencies.
On August 28, three U.S. representatives shared worries about new rules for stablecoins and cryptocurrencies set by the Federal Reserve.
The objection was signed by three members of the Republican party: Patrick McHenry, French Hill, and Bill Huizenga. McHenry is the Chair of the House Financial Services Committee, Hill is the Chair of the Committee on Financial Services Subcommittee on Digital Assets, and Huizenga is the Chair of the Committee on Financial Services Subcommittee on Digital Assets, Financial Technology, and Inclusion.
In their objection, the lawmakers said:
“We are concerned that these actions are being taken to subvert progress made by Congress to establish a payment stablecoin regulatory regime … [this] will undoubtedly deter financial institutions from participating in the digital asset ecosystem.”
The lawmakers disagreed with two rules: the Federal Reserve’s “Supervisory Nonobjection Process for State Member Banks Seeking to Engage in Certain Activities Involving Dollar Tokens” and its “Novel Activities Supervision Program.”
These rules, introduced on August 8, lay out general requirements for banks dealing with cryptocurrencies. The first rule makes banks get written permission from the Federal Reserve before using, holding, or trading stablecoins. The second rule involves banks joining a larger program to oversee cryptocurrencies.
Bipartisan Option
The representatives said that the two rule sets stop banks from being part of the payment stablecoin or digital asset world, even if the rules seem to have instructions for compliance.
They weren’t happy because the rules didn’t follow the Administrative Procedure Act, and they asked the Federal Reserve for more details.
Even though they had concerns, the representatives agreed that there should be rules. Instead, they proposed a bipartisan bill called the Clarity for Payment Stablecoins Act. Rep. Patrick McHenry, who was one of the people behind the complaint, supports this new bill.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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