Former Republican congressman Patrick McHenry, who previously chaired the House Financial Services Committee, has admitted that splitting stablecoin regulations from the broader crypto market-structure bill was a mistake. Speaking on Friday, McHenry told journalist Eleanor Terrett that this decision impaired the passage of the Digital Asset Market Clarity Act (CLARITY Act). He believed at the time that separating stablecoins into the GENIUS Act would allow for bipartisan legislation, but acknowledged that he was wrong.
McHenry also blamed the Senate's slow process and the political cycle for the bill's failure. He noted that Democrats walked away from what he called an excellent compromise. Additionally, he criticized the crypto industry for holding out for a perfect law rather than accepting a good one early in the year. Without legislative clarity, McHenry warned that crypto rules would now come from regulators, which could be reversed if the industry steps back.
McHenry was skeptical of Rep. Maxine Waters, a Democrat on the House Financial Services Committee, calling her proposed crypto rules 'very bad law.' Despite this, he believes the industry has enough support in both parties to block harmful legislation. He also stated that the incoming Congress would not pass a market-structure bill after the recent election results.
Circle Internet Group (CRCL), the issuer of the USDC stablecoin, saw its stock close down over 2% on Friday. Retail sentiment around CRCL remained bearish, with chatter staying at normal levels.