The Archive

A fresh Senate stablecoin bill is coming into focus

There’s a new stablecoin package forming in the Senate.

Sens. Kirsten Gillibrand (D-N.Y.) and Cynthia Lummis (R-Wyo.) have worked together before on broader crypto legislation that would have touched on stablecoins. This time, the pair is focused on a “discrete” stablecoin bill.

The senators tell us the effort is coming partly in response to policy developed across the Capitol. The Republican-led House Financial Services Committee cleared stablecoin legislation in July with some bipartisan support, but many Democrats are concerned about the Federal Reserve’s limited oversight role in the new framework.

“What we are doing is a discrete bill just on stablecoins right now, so if the House moves on it, we will have a unique bill in the Senate to mark up, hopefully,” Gillibrand told us.

Lummis, a top crypto backer on Capitol Hill, said that negotiations are ongoing at the staff level and the goal is to “craft a bill that is bipartisan and bicameral.”

How exactly this approach will vary from the House’s is the big question. Negotiations are ongoing, so don’t expect hard details for a minute. But Gillibrand acknowledged the role of Fed supervision over state-chartered stablecoin firms as a major focus.

“It’s a little more refined on what the state path is outside of a state bank,” Gillibrand said. “So, if you want to have [a crypto company] be an issuer of a stablecoin, what requirements will be on them, what Fed oversight would be included? We think we have a nuanced position that might be the sweet spot.”

We still expect the Senate’s approach to feature a significant role for state governments. That’s a priority for Lummis.

“I’m going to be as protective as I can of state banking being able to operate as the dual-rail system in our banking system, even when it comes to stablecoins,” Lummis said. “That said, I’m willing to listen to counterarguments if there are those who think that the Fed should have a bigger role than I personally envision.”

Laura Peavey, a spokesperson for House Financial Services Committee Chair Patrick McHenry (R-N.C.), said “there is bipartisan and bicameral agreement that the best approach to regulating the issuance of payment stablecoins is to build on successful state regimes, like New York.”

Could this new approach be enough to interest Senate Banking Committee Chair Sherrod Brown (D-Ohio)? He’s keeping his options open. “It’s on my radar,” he told us.

– Brendan Pedersen

2024

N.Y. court orders state to redraw congressional maps

New York Democrats will likely face better odds at flipping a number of GOP-held House seats after a state court ordered new congressional lines drawn ahead of 2024.

In a 4-3 decision, the State Court of Appeals told New York’s Independent Redistricting Commission to come up with a new map by Feb. 28.

That commission is a bipartisan entity tasked with finding common ground on House districts. Last cycle, the IRC failed to agree on a map and the Democratic-controlled state legislature stepped in to implement a Democratic gerrymander. Of course, that gerrymander was thrown out in the courts, resulting in a special master creating a competitive map where Republicans triumphed in key swing seats.

There’s a widespread sense that if the IRC can agree on new lines, they will almost certainly benefit Democrats.

DCCC Chair Suzan DelBene hailed the decision as “a win for democracy.”

“As a result of the court’s enlightened decision, the Independent Redistricting Commission can now begin the process of drawing fair maps,” House Minority Leader Hakeem Jeffries said in a statement.

NRCC spokesperson Savannah Viar said the decision showed Democrats are “trying to cheat their way to power” by allowing the party a “second attempt at gerrymandering the maps.”

There are currently five New York Republicans — Reps. Nick LaLota, Anthony D’Esposito, Mike Lawler, Marc Molinaro and Brandon Williams — who represent districts that President Joe Biden won in 2020.

— Max Cohen

👀

What we’re watching: Wednesday

The House: It’s a big day in impeachment news. Hunter Biden is scheduled to appear for a behind-closed-doors deposition in front of the House Oversight Committee tomorrow. But the younger Biden is unlikely to show as his lawyers are demanding that a public hearing is held instead.

The House is also poised to vote on whether to officially authorize an impeachment inquiry into President Joe Biden. After months of resisting holding an official vote, Republican leadership decided it was necessary to add legal heft to their subpoenas.

The Senate: The Senate is likely to wrap up the annual defense authorization bill as soon as tomorrow, sending it over to the House for final approval.

We’re also keeping a close eye on the border security talks and whether there’s enough movement to keep the Senate in session past this week.

We also expect that Senate Majority Leader Chuck Schumer will lay out a plan to approve the promotions of four-star general candidates who are still being held up by Sen. Tommy Tuberville (R-Ala.).

— Max Cohen and Andrew Desiderio

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