On April 2, 2025, the meeting of the U.S. House Financial Services Committee regarding the STABLE Act became tense as Democrats criticized President Trump's conflict of interest in the stablecoin sector. With the Trump family's World Liberty Financial USD1 product, will the STABLE Act overcome political barriers to legalize stablecoins in the U.S., or will it be derailed by 'conflict of interest'?
STABLE Act: A Legal Step to Regulate Stablecoins
The bill #STABLEAct discussed at the House Financial Services Committee on Wednesday (April 1, 2025) aims to create a legal framework for stablecoins in the U.S. Stablecoins are digital assets pegged to the USD, allowing crypto traders to buy and sell without needing to directly convert to fiat currency. The STABLE Act requires stablecoin issuers to comply with anti-money laundering (AML) laws and reserve audits, ensuring transparency and legality in the U.S. market.
The bill received bipartisan support, with expectations that many Democratic lawmakers will vote in favor. However, the involvement of the Trump family in the stablecoin sector has sparked heated controversy, threatening to undermine consensus.
Conflict of Interest: The Trump Family and World Liberty Financial
The Trump family recently announced the stablecoin World Liberty Financial #USD1 , aiming to enhance the USD's position in the digital and international markets. However, the timing of the announcement – right as the STABLE Act is under consideration by Congress – has led Democrats to suspect a conflict of interest. A source told Decrypt that World Liberty was not planning to launch soon, but leaked blockchain data forced them to go public.
Democrats, including co-sponsor of the STABLE Act Sam Liccardo (D-CA), have proposed amendments to ban the President, cabinet members, First Lady, and special staff (like Elon Musk) from issuing stablecoins while in office. Liccardo emphasized: “Preventing high-ranking officials like Trump from issuing stablecoins is obvious, to avoid foreign powers exploiting this token to influence the President.” However, these amendments were rejected by the majority of Republicans on the committee through a voice vote.
Chairman French Hill (R-AR) rebutted: “The STABLE Act does not pick winners and losers. All issuers must follow the same rules. If you don’t want to use stablecoins, don’t use them.” Hill believes that banning certain issuers – including the President – would stifle market competition.
Democrats Are Concerned: Trump Could Exploit Power
Democrats disagree with Hill's perspective. Congressman Stephen Lynch (D-MA) argued: “Trump is not like any other issuer because he is the President. He can use taxpayer money to support his family business in times of trouble.” This concern arises from Trump overseeing the first regulatory framework for digital assets in the U.S., while his family has direct interests in the crypto industry (World Liberty, meme coin).
On Monday (March 30, 2025), Hill admitted to Decrypt that Trump's crypto activities – particularly stablecoins and meme coins – have made drafting the legislation “more complicated.” Nevertheless, a committee staff member noted that the debate has not significantly changed bipartisan support. Democratic lawmakers who co-sponsored the STABLE Act last month (such as Liccardo) are unlikely to withdraw their support just because amendments were not passed.
Impact on the Stablecoin Market
Stablecoin: USDT (Tether) leads with a market cap of $144 billion, but a clear regulatory framework from the STABLE Act could promote new stablecoins (World Liberty USD1).
Crypto Market: Market capitalization fell by 11.65% ($2.88 trillion), but stablecoins remain a 'lifeline' (trading volume increased by 15% Q1/2025, according to CoinMarketCap).
Investors: The STABLE Act could increase confidence in stablecoins, but Trump's conflict of interest raises concerns about fairness (Tether was fined $41 million in 2021 for inaccurate reserve reporting).
Conclusion: Will the STABLE Act Overcome the 'Ghost' of Trump?
The debate on the STABLE Act in the House shows a deep divide: Democrats are concerned about Trump's conflict of interest, while Republicans defend market competition. Nevertheless, bipartisan support seems largely unaffected, and the STABLE Act may soon legalize stablecoins in the U.S. Will this regulatory framework help stablecoins develop transparently, or will it be hindered by the 'ghost' of conflict of interest? As Congress continues to discuss, the future of stablecoins in the U.S. remains a focal point of attention.
Risk Warning: Investing in crypto and stablecoins carries high risk due to price volatility and regulatory uncertainty. Please carefully consider before participating. #anhbacong
