Sen. Brown Warms to Stablecoin Law, Eyes Bipartisan Support

Sen. Sherrod Brown open to stablecoin legislation, signaling potential bipartisan support for regulatory clarity.

By Athena Xu

4/16, 16:46 EDT
Bitcoin / U.S. dollar

Key Takeaway

  • Sen. Sherrod Brown, a known crypto-skeptic, shows openness to stablecoin legislation, signaling potential progress in the regulatory landscape.
  • Stablecoin laws have been stalled but are seen as "lowest-hanging fruit" for regulation due to their resemblance to traditional financial products.
  • Bipartisan interest in Congress, with optimism from both Senate and House representatives, hints at possible new stablecoin law this year.

Stablecoin Legislation on the Horizon

Sherrod Brown, the influential Senate Banking Committee chairman known for his skepticism towards cryptocurrencies, has signaled a potential shift in stance towards stablecoin regulation. In a recent Bloomberg interview, Brown expressed openness to advancing legislation for stablecoins, a type of cryptocurrency designed to maintain a stable value relative to a specified asset, like the U.S. dollar. However, he emphasized that his concerns must be addressed before fully supporting a stablecoin law. This development is noteworthy as Congress has struggled for years to pass new laws for cryptocurrencies, despite the clear demand for greater clarity from both critics and proponents of digital assets.

A Package Deal Approach

Brown's approach to stablecoin legislation is intriguing, as he suggests packaging it with other significant bills. These include a bill authorizing banks to do business with marijuana businesses and another measure aimed at clawing back compensation from executives at failed lenders. This strategy could potentially streamline the legislative process and garner broader support by addressing multiple issues within a single legislative effort. Brown's tentative support for advancing stablecoin legislation, combined with his strategic approach, could significantly enhance the chances of passage.

Bipartisan Optimism

The push for stablecoin regulation is not limited to one side of the political aisle. Over in the Republican-controlled House, Rep. Patrick McHenry (R-N.C.), who is soon to retire, has also expressed optimism about the U.S. passing a new stablecoin law this year. This bipartisan interest underscores the growing recognition of the need for regulatory clarity around stablecoins, which are increasingly seen as resembling regulated products like money-market funds. The fact that stablecoins are backed by conventional assets like U.S. Treasuries adds to the urgency of establishing regulatory guardrails.