Recent discussions between House leaders and Senate Majority Leader Chuck Schumer may result in stablecoin legislation being addressed during this summer’s session or in the year-end lame-duck session, according to TD Cowen, an investment bank.

House Financial Services Chair Patrick McHenry and ranking member Maxine Waters met with Schumer last week to discuss stablecoin legislation, an area of financial technology requiring regulatory clarity.

Reports from Punchbowl News and Politico suggest that the discussions also explored the potential of linking the stablecoin bill to crucial legislative matters such as the Federal Aviation Administration (FAA) reauthorization and a proposed cannabis banking bill.

The urgency surrounding the FAA reauthorization, initially scheduled for a May 10 deadline, might be extended due to international concerns, particularly recent tensions following an attack by Iran. This situation could give Congress more flexibility to develop and negotiate a broader legislative package, including stablecoin regulation. Currently, the House and Senate are reconciling differences in their FAA reauthorization bills, focusing on safety issues.

Regarding stablecoin legislation, Waters and McHenry have been working on a regulatory framework, mainly concerning the jurisdiction of regulatory authorities. While the committee advanced the bill, partisan disputes and a contentious provision regarding the role of state regulators in stablecoin issuances hindered progress.

In the Senate, Senators Cynthia Lummis and Kirsten Gillibrand are preparing to introduce a bill aimed at clarifying stablecoins and safeguarding consumers. Discussions are ongoing about potentially linking this effort with the Secure and Fair Enforcement Regulation Banking Act, which aims to facilitate banking services for the marijuana industry. However, obstacles remain due to opposition from certain influential lawmakers.

The likelihood of a legislative compromise remains uncertain, particularly given House Speaker Mike Johnson’s resistance to the marijuana banking bill. Nonetheless, the upcoming sessions and the year-end legislative rush provide several opportunities for the stablecoin bill to be integrated into significant legislative endeavors, such as the NDAA, or other substantial bills during the lame-duck session.