Nikolas Sargeant
The House Financial Services Committee has approved legislation aimed at establishing clearer regulations for dollar-pegged stablecoins, passing the STABLE Act with a 32-17 vote that creates a comprehensive framework for issuance and oversight while requiring one-to-one reserve backing and anti-money laundering safeguards.
Reserve Requirements and AML Standards Take Center Stage
The bill, introduced by Committee Chair Rep. French Hill (R-Ark.) and Rep. Bryan Steil (R-Wis.), establishes strict standards for stablecoin issuers, including one-to-one reserve backing, capital requirements, and anti-money laundering protections. During the hearing, Hill emphasized the need for regulatory evolution, stating, "Blockchain technology continues to transform the way money moves. Regulators must evolve alongside these innovations." This marks a renewed push for stablecoin regulation after similar initiatives stalled in 2023 amid partisan disagreements and criticism of the Biden administration.
House and Senate Regulatory Approaches Show Key Differences
The STABLE Act takes a more permissive stance toward foreign issuers than its Senate counterpart, allowing them a two-year grace period for compliance while the Senate's GENIUS Act would bar new foreign issuers entirely. The committee hearing featured heated debate over how to handle foreign issuers like Tether and concerns about potential conflicts of interest related to former President Trump's growing involvement in cryptocurrency. Rep. Maxine Waters (D-Calif.) strongly opposed the bill, arguing it could empower political figures with personal stakes in the crypto industry.
Circle's chief strategy officer endorsed the legislation just one day after the company filed for an IPO, while Federal Reserve Chair Jerome Powell recently affirmed the central bank's support for stablecoin regulation. Looking ahead, the committee plans to consider a broader market structure bill next week, with Rep. Steil describing the two initiatives as "like peanut butter and jelly—you need both for a complete sandwich."
