United States Senator Bill Hagerty is building on House member Patrick McHenry’s stablecoin legislation. Hagerty has released a discussion draft of the Clarity for Payment Stablecoins Act of 2024, with a few refinements of McHenry’s 2023 bill of the same name. McHenry is retiring at the end of his current term.

Hagerty, a member of the Senate Banking Committee,  acknowledged  the new legislation’s debt to its predecessor and emphasized its key differences in a statement.

Tweaking a consensus

The most dramatic change in Hagerty’s bill, as compared to the 2023 version, concerns the role of states.

In a final section, titled State-Level Regulatory Regime, which has no analog in McHenry’s bill, Hagerty specifies that stablecoin issuers that have less than $10 billion in market capitalization can be regulated at the state level. Issuers of stablecoins with larger caps can seek waivers to allow them to remain under state, rather than federal, regulation.

Source: Senator Bill Hagerty

In addition, the bill changes the federal agencies that supervise some issuers. Hagerty said:

“These key provisions and other technical modifications strengthen the state pathway to stablecoin issuance, establishing a tailored regulatory regime that most effectively facilitates innovation and protects consumers.”

The 2023 stablecoin bill  passed out of the House  Financial Services Committee with bipartisan support, but negotiations continued. Committee ranking member Maxine Waters  released  a statement in September expressing her satisfaction with the bill:

“Before the end of this year, I want us to strike a grand bargain on stablecoins and other long overdue bills. Since 2022, we have been working for hours on end to reach an agreement and have each made concessions.”

Waters went on to stress the important role of the Federal Reserve Board in supervising stablecoins. 

Sen. Hagerty’s draft stablecoin legislation. Source: Bill Hagerty

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Not the lone voice on stablecoins

Hagerty introduced the Stablecoin Transparency Act in 2022, during the previous Congress. That bill notably  defined stablecoins as securities , which the 2024 bill explicitly does not. The Stablecoin Transparency Act did not make it out of the Senate Committee on Banking, Housing, and Urban Affairs.

Source: Sen. Kirsten Gillibrand

Pro-crypto senators Cynthia Lummis and Kirsten Gillibrand  introduced stablecoin legislation  in April 2024.

At 179 pages, their Lummis-Gillibrand Payment Stablecoin Act is more than triple the length of McHenry’s and Hagerty’s bills. The Lummis-Gillibrand bill is still being considered by the Senate Committee on Banking, Housing, and Urban Affairs.

Hagerty is accepting comments on his draft bill through Nov. 1.

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