Today, Congresswoman Maxine Waters (D-CA), the top Democrat on the House Financial Services Committee, delivered the following opening statement at a full Committee markup considering a package of anti-investor ESG bills, along with a rushed and problematic stablecoins bill.
Thank you, Chairman McHenry.
Good morning. Today, this Committee is being forced by the extreme MAGA wing of the Republican party to address a trove of anti-ESG, anti-investor, and wholly anti-capitalist bills, but I’m going to instead focus on the one bill I hoped would be bipartisan. But because of the impatience of Republican leadership, we are taking up a bill that is deeply problematic and bad for America.
I know that today many of you expected this Committee to markup a broadly bipartisan stablecoins bill. Important legislation takes time, but the Chair is impatient and has decided to abruptly end our negotiations and move forward with a bill that is deeply problematic.
First, Chairman McHenry’s bill promotes a race to the bottom by creating 58 different licenses with Federal regulatory approval and robust oversight over only 2 of the licenses, that are the licenses for banks and Fed-approved nonbanks. Moreover, Republicans take preemption to a whole new level, allowing individual states to preempt each other. Texas, for example would have no ability to stop coins from being issued in their state by coins from New York.
The bill undermines strong reserve requirements by allowing any Federal or State payment stablecoin regulator to unilaterally expand the list of eligible reserve assets, without restriction, at any time. This is the core of the bill—strong reserves are what ensures that a stablecoin remains stable. A state, for example, could attract issuers to come and back their coins by any assets they want, or the issuers want, regardless of whether those assets are actually stable. Stablecoin means that those people who have their money in stablecoins can request them and get them back dollar per dollar, but if in fact the assets are not credible, if they are not defined and we don’t know if they are real or not, that could be a major problem for those requesting their money back and not being able to get it because the assets were phony.
The bill also removes the ban on all commercial entities from participating as an issuer. So under this framework, Amazon, Walmart or Facebook can create their own stablecoins, or even be affiliated with a stablecoin issuer. Does no one remember the numerous hearings we had when Mark Zuckerberg tried to do this just four years ago? Facebook, with its own coin, could become effectively a global bank with 2 billion customers overnight.
Additionally, the bill provides the Fed with no supervisory or examination powers for state licensed entities, so it is unclear on what authority and to what extent they could act Look around the world, no other global regime undermines their central government’s authority with something so important as a nation’s money supply.
- The bill grants no actual enforcement authority to the Fed with respect to state licensed entities.
- The lack of Federal supervisory, examination, or enforcement powers renders the so-called Federal floor unenforceable and meaningless.
- And as icing on the cake, Republicans struck every reference to those two hated words, “diversity and inclusion” which is consistent with their culture wars.
I urge Republicans to pull these extremist pieces of legislation from the markup, end your culture wars and stop undermining America so we can get back to addressing issues our communities care about.
We have offered to continue negotiations, we too would like a real bipartisan bill, and I don’t know what the rush is. Why the rush at this particular time? We should take the time, we should work with the Administration. The Administrations Advisory Committee and the Presidents’ Advisory Committee asked us to work on stablecoins. Now, I want you to know the Fed did not support the bill, Treasury does not support the bill, and we don’t have support of those who've asked us to get involved with a stablecoin bill to begin with.
I yield back.