#USStablecoinBill As of Monday, May 5, 2025, there have been notable developments regarding stablecoin legislation in the United States. Here's a summary of the recent news:
Key Bills and Progress:
* GENIUS Act (S. 919): The "Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025" was reported by the Senate Banking, Housing and Urban Affairs Committee on March 18, 2025. This bill aims to establish a regulatory regime for payment stablecoins, defining them as digital assets issued for payment or settlement and redeemable at a fixed amount (e.g., $1).
* It outlines requirements for issuing payment stablecoins, including maintaining reserves on at least a 1:1 basis with acceptable assets like U.S. currency, Treasury bills, and deposits at insured banks.
* Issuers would need to make monthly public disclosures of their reserve composition, which would be examined by a registered public accounting firm.
* The bill clarifies that payment stablecoins are not securities and are not federally insured.
* It proposes a dual regulatory framework where stablecoin issuers with less than $10 billion in outstanding value could opt for state regulation if the state's regime is deemed "substantially similar" to the federal one. Larger issuers would likely face federal oversight.
* STABLE Act: The "Stablecoin Transparency and Accountability for a Better Ledger Economy Act of 2025" (H.R. 2392) was passed by the House Financial Services Committee on April 3, 2025.
* This bill also aims to establish a federal supervisory framework for stablecoins and their issuers.
* It shares similarities with the GENIUS Act in terms of reserve requirements and the goal of creating a clear regulatory pathway.
* Clarity for Payment Stablecoins Act of 2023 (H.R. 4766): While introduced in the previous Congress, this bill is still relevant as a foundational effort towards stablecoin regulation.
Key Issues and Debates:
* National Security and Illicit Finance: Some lawmakers, like Senator Warren, have expressed concerns that the current versions of the bills do not adequately address the risks of stablecoins being used for terrorism financing, sanctions evasion, and other illicit activities. They advocate for stronger measures to prevent these risks.
* Big Tech Involvement: There are concerns that stablecoin legislation could inadvertently pave the way for large technology companies to enter the banking sector, potentially leading to an over-concentration of power.
* State vs. Federal Authority: Both the GENIUS Act and the STABLE Act attempt to balance state and federal oversight. However, ensuring consistency and avoiding a fragmented regulatory system remains a challenge.
* Foreign Issuers: A significant point of contention is the regulation of offshore stablecoin issuers. Critics argue that the proposed bills do not sufficiently address the risks posed by stablecoins issued outside the U.S.
* Reserve Requirements and Holder Protection: The need for robust reserve requirements and clear rules regarding the rights of stablecoin holders in case of issuer insolvency are crucial aspects being discussed. The collapse of TerraUSD in 2022 highlighted the potential for significant market instability.
* Treasury Department Authority: Some argue for enhancing the Treasury Department's authority to prevent illicit finance within the stablecoin ecosystem, similar to its existing authority over other dollar-denominated transactions.
Potential Timeline:
* There is optimism that stablecoin legislation could be enacted this year, with the Trump administration reportedly aiming to sign such bills before the August recess.
Overall:
The U.S. Congress is actively working on establishing a regulatory framework for stablecoins. Both the House and Senate have passed relevant bills out of their respective committees, indicating significant progress. However, key differences and concerns regarding consumer protection, national security, and the balance of regulatory authority still need to be addressed as the legislative process moves forward. The outcome of these discussions will significantly shape the future of stablecoins in the U.S. and their role in the broader financial system.
