The U.S. crypto industry has been eagerly awaiting a potential review of stablecoin-related regulations for some time now. Last fall, representatives of both major political parties in the House Financial Services Committee agreed on a common draft bill, setting the stage for the first regulation of stablecoins. The discussion draft legislation, designed to regulate these digital tokens attached to a steady asset such as the dollar, puts together the ideas of Maxine Waters (D-Calif.) and Patrick McHenry (R-N.C.). With the hearing conducted by the committee this Wednesday, Republicans supported the plan made by their colleagues while Democrats had strong doubts.

The Democrats, led by Congresswoman Maxine Waters, were strongly critical of the proposed legislation. They noted that, since first reaching an agreement last fall, some important events have taken place, such as the collapse of crypto exchange FTX. The Chairman of the Financial Services Committee, Rep. French Hill (R-Ark.), claimed that the bill is a "bipartisan baby named Maxine McHenry", for which both sides should come up with revisions. On the other hand, Democrat Rep. Stephen Lynch highlighted that the draft language released was outdated and fails to reflect the lessons learnt from the demise of major crypto issuers from last year.

McHenry stressed the need for a federal law on stablecoins at the hearing, citing it is vitally important both domestically and internationally. Another issue is the position of Sen. Sherrod Brown (D-Ohio), who as Chair of the Senate Banking Committee will have a crucial role to play in the approval process. His opinions regarding the matter have been ambiguous so far, with concerns that providing any custom oversight may encourage the sectors he considers too unsafe. While the expectations were high back in the fall, the current scenario indicates that they may end up being exceeded.



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