The US Senate held another hearing on stablecoins just a week after completing the first-ever House Committee hearing that included crypto executives. While the conversation between the House Committee on Financial Services members and the crypto officials was amicable, the Senate Committee on Banking, Housing, and Urban Affairs hearing on December 14 proved contentious.

The hearing focused on how stablecoins function, how crypto adopters use them, and their risks. In the sitting, the committee’s Chairman Sherrod Brown, who is also Ohio’s Senator, said stablecoins are neither decentralized nor transparent. According to him, anyone that injects money into stablecoins risks never getting it back.

Notably, Senator Brown has been a stablecoin critic for a long time and has been pushing relentlessly for the regulation of stablecoin issuers like Circle and Tether. For instance, he sent a letter to stablecoin issuers and exchanges like Coinbase, Gemini, Binance.US, and Paxos asking them to provide information on how they protect their consumers and investors against stablecoin-related risks.

Apart from Brown, Massachusetts Senator Elizabeth Warren bashed stablecoins, saying,

To clamp down or foster innovation?

However not every committee member had a bearish outlook on stablecoins. For instance, Pennsylvania Senator Pat Toomey said stablecoins are a vital cogwheel in the crypto ecosystem.

He pointed out that stablecoins offer tremendous potential benefits, including greater payment speed, lower payment costs, expanded access to the payment system, and programmability.

Toomey called on Congress to introduce sensible regulations that do not stifle innovation in the evolving digital economy, seeing as clamping down on the sector would undermine the country’s competitiveness.

He urged other committee members to reconsider their harsh stance on stablecoins, saying,

Let’s have the humility to recognize that many of our views about how financial services are delivered and how investments work are quickly becoming outdated.

This news comes as stablecoins continue getting increased scrutiny from regulators across the globe. In the past week, Japan’s Financial Services Agency (FSA) disclosed that it seeks to propose legislation that would limit the issuance of stablecoins to banks and wire transfer companies.

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