McHenry, chairman of the U.S. House of Representatives Financial Services Committee, said he has sent a letter to Fed Chairman Powell on stablecoins for payment functions. The regulatory framework proposed by Congress will better protect consumers. Concerns that the actions taken by the Federal Reserve will upend the progress Congress has made in legislation .
“We are concerned that these actions are designed to upend Congress’ progress in establishing a regulatory regime for stablecoins for payments,” the letter reads. Furthermore, if these letters are preserved, they will undoubtedly prevent financial institutions from participating in the digital asset ecosystem.
The letter also pointed out that the SR 23-7 and SR 23-8 letters issued by the Federal Reserve are actually intended to effectively prevent banks from issuing payment stablecoins or participating in the payment stablecoin ecosystem.
“While the regulatory no-objection process is disguised as a process for guiding how such activities may be permitted, it is clear that the Fed does not intend to allow any such activity, at least as it relates to public, permissionless blockchains,” the letter said.