Senator Elizabeth Warren criticized the push for a stablecoin bill without anti-money laundering laws in place, citing national security concerns, a Monday letter to House Financial Service Committee Chairman Patrick McHenry (R-NC) and Ranking Member Maxine Waters (D-CA) reveale.
Stablecoin Bill Could Increase Risks, Warren Warns
Throughout the recently published letter, Warren argued that creating new regulatory frameworks for stablecoins could “amplify and entrench” risks they pose to the American banking sector.
As Congress returns this week and crypto returns to the convo, Sen. Warren is out with a letter to Reps. McHenry and Waters throwing cold water on the idea of a stablecoin bill.
“Efforts to create new regulatory frameworks around the $157B stablecoin market, including those… pic.twitter.com/9LJsb3ye0v
— Alexander Grieve (@AlexanderGrieve) April 9, 2024
In part, Warren claims that stablecoins pose a threat to consumers and the banking system at large, including payment system destabilization, national security risks, and more.
“Policymakers should be weary of efforts to integrate stablecoins into the formal banking system – or extend any of the concomitant safety net protections to stablecoin issuers – without strong rules that ensure safety and soundness,” the senator wrote.
Senator Elizabeth Warren Pushes For DAAMLA, Cites National Security Risks
News of Warren’s letter follows McHenry’s 2023 yet-to-be-passed “Clarity for Payment Stablecoins Act,” which would see increased regulation on stablecoin cryptocurrencies, similar to traditional financial institutions.
Just yesterday, Warren furthered her efforts to pass DAAMLA during a Senate hearing entitled “An Update from the Treasury Department: Countering Illicit Finance, Terrorism and Sanctions Evasion,” where she claimed that the U.S. “doesn’t have the right anti-money laundering laws in place” if it’s going to advance stablecoin regulation efforts.
“If we are going to create new on ramps, increasing traffic, which is exactly what the House bill does, then we need a regulatory framework that will put the rules for Anti-Money Laundering in place so that we do not have more opportunities for Iran and terrorists and drug lords and human traffickers to make more money,” she said.
Warren has long been a staunch anti-crypto advocate, going so far as to draft the controversial “Digital Assets Anti-Money Laundering Act” (DAAMLA) in 2022, which would see key players in the crypto industry such as miners, validators, and providers face stringent oversight rules.
“Name your bad guy and crypto is the way they can move money around,” she said during Tuesday’s hearing.
A Stablecoin Bill in 2024?
During an interview with CNBC earlier this year, longtime stablecoin legislation advocate and Circle CEO, Jeremy Allaire, said he believes there is a “good chance” stablecoin legislation will get passed in 2024.
😍📃 Circle CEO Jeremy Allaire Expects US to Pass Stablecoin Legislation in 2024
Here’s a shortcut👇
— Cryptonews.com (@cryptonews) January 16, 2024
“I think there’s momentum,” Allaire said. “I think there’s a very good chance of seeing this pass into law this year.”
Warren’s letter to Waters and McHenry signals her unwavering determination to regulate crypto, but the extent of lawmaker consensus is yet to be determined.
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