Stablecoin bill unlikely to be tied to FAA reauthorization, so efforts are on hold again

Supporters of the long-awaited stablecoin legislation in the US have tried to tie it to an unrelated mandatory reauthorization bill, but leaders in the Senate and House of Representatives are keen to keep those efforts away from such partisanship, a Democratic aide said.

US lawmakers have been busy this week with serious conversations about whether to include a stablecoin regulation amendment in the Federal Aviation Administration's looming reauthorization bill.. Such attempts to use the bill for other business have been rejected by leaders advocating for the so-called clean bill, so stablecoin negotiations are being held between House Financial Services Committee Chairman Patrick McHenry (R-N.C.) and his top Democrat, R.E.P.. Maxine Waters (D-Calif.) will return to negotiate the final deal, said the aide, who asked not to be named because the T talks are public.

However, major maneuvers in stablecoin oversight show how much closer this vital sector of the industry is becoming to the light of day.

For the first time, the necessary senators took part in the negotiations. Senate Banking Committee Chairman Sherrod Brown (D-Ohio) said he is ready to combine stablecoin regulation with his push to pass legislation to open up access to the financial system for cannabis businesses. And Senate Majority Leader Chuck Schumer (D-N.Y.) appeared to support it, even as Minority Leader Mitch McConnell (R-Ky.) continues to signal that he opposes marijuana banking.

The energy expended this time could indicate that stablecoins may resurface as other bills move through Congress that need to be passed, and may now be intertwined with high-profile marijuana legislation.

“We believe this move will show how much support there is on both sides of Congress and who remains opposed,” Jaret Seiberg, an analyst at TD Cowen, said in a research note. «That's why we see these efforts providing a glimpse of what could happen with these bills later this year when we expect a real push for passage.»

A vehicle that has stablecoin (and possibly marijuana) legislation in place must definitely make sense. As the industry previously learned, the infrastructure bill was the most significant move against Crypto to date.

A final compromise version of the stablecoin bill that would satisfy both parties and both chambers has yet to emerge, so industry insiders are hesitant to support it until they can take a good look at it.

“As with any legislation, the devil is in the details,” Christine Smith, CEO of the Blockchain Association, told CoinDesk.. “We look forward to seeing and providing feedback on any new compromise designs that emerge.”

At this point, several lawmakers may have strong incentives to pass a stablecoin bill.

“Brown has an incentive to get SAFER Banking [the marijuana banking bill] across the finish line this year, which would give him a WIN on a popular voter issue—cannabis reform—months before a tough re-election fight,” he argues.. Tuesday's analysis from Beacon Politics Advisors, a firm that tracks financial politics in Washington.. Beacon also noted that this is «an issue that will define the legacy of McHenry, who is leaving Congress at the end of his term.»

Read more: US Senators Lummis and Gillibrand Consider New Stablecoin Legislation