The Federal Reserve is seemingly running interference with congressional efforts to regulate stablecoins, according to a letter recently sent to Fed Chairman Jerome Powell from Chairman of the U.S. House of Representatives Financial Services Committee Patrick McHenry and subcommittee chairs French Hill and Bill Huizenga. The legislators were objecting to two Fed letters: SR 23-7 on the Novel Activities Supervision Program and SR 23-8 titled “Supervisory Nonobjection Process for State Member Banks Seeking to Engage in Certain Activities Involving Dollar Tokens.”The legislators wrote that the letters “effectively prevent banks from issuing payment stablecoins — or engaging in the payment stablecoin ecosystem” while “masked as guidance outlining a process by which these activities can be permissible.” The January policy extended restrictions placed by the Office of the Comptroller of the Currency on national banks to state banks.In addition, the letter claimed that the Fed letters were issued without observing the notice and comment processes required by the Administrative Procedure Act. The legislation referred to by the legislators is the Clarity for Payment Stablecoins Act of 2023, which McHenry introduced on July 20.The committee members’ letter included a list of eight questions, the bulk of which concern implementation of the guidance found in the two Fed letters. Besides that, the letter demands records to determine the timeline of the drafting of the Fed letters.The Federal Reserve is seemingly attempting to interfere with congressional efforts to regulate stablecoins, according to a letter sent to Fed Chairman Jerome Powell from Chairman of the U.S. House of Representatives Financial Services Committee Patrick McHenry and subcommittee chairs French Hill and Bill Huizenga. The legislators were objecting to two Fed letters: SR 23-7 on the Novel Activities Supervision Program and SR 23-8 titled “Supervisory Nonobjection Process for State Member Banks Seeking to Engage in Certain Activities Involving Dollar Tokens.”The legislators wrote that the letters “effectively prevent banks from issuing payment stablecoins — or engaging in the payment stablecoin ecosystem” while “masked as guidance outlining a process by which these activities can be permissible.” The January policy extended restrictions placed by the Office of the Comptroller of the Currency on national banks to state banks.In addition, the letter claimed that the Fed letters were issued without observing the notice and comment processes required by the Administrative Procedure Act. The legislation referred to by the legislators is the Clarity for Payment Stablecoins Act of 2023, which McHenry introduced on July 20.The committee members’ letter included a list of eight questions, the bulk of which concern implementation of the guidance found in the two Fed letters. Besides that, the letter demands records to determine the timeline of the drafting of the Fed letters.The U.S. House of Representatives Financial Services Committee has sent a letter to Fed Chairman Jerome Powell expressing concern that the Federal Reserve is attempting to interfere with congressional efforts to regulate stablecoins. The letter objects to two Fed letters that the legislators claim “effectively prevent banks from issuing payment stablecoins — or engaging in the payment stablecoin ecosystem.” The committee members’ letter includes a list of eight questions and demands records to determine the timeline of the drafting of the Fed letters.

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Information	Details
Geography	North America
Countries
Sentiment	negative
Relevance Score	10
People	Patrick McHenry, Jerome Powell, French Hill, Bill Huizenga
Companies	Administrative Procedure Act, Federal Reserve, Clarity for Payment Stablecoins Act of 2023, U.S. House of Representatives Financial Services Committee, Office of the Comptroller of the Currency
Currencies	None
Securities