Over the past few decades, the global dominance of the dollar has relied on the evolutionary mechanism of the 'Bretton Woods System - Petrodollar - U.S. Treasury Bonds + Swift System'. However, entering the Web3 era, decentralized financial technology is gradually shaking traditional clearing and payment paths, and stablecoins pegged to the dollar are quietly becoming a new tool for 'dollars going abroad'.
In this context, the significance of stablecoins has long surpassed mere compliance or non-compliance of a single crypto asset; it may very well be the digital carrier of 'dollar hegemony' in the Web3 era.
On March 26, 2025, the U.S. Congress officially proposed the (STABLE Act) (Stablecoin Transparency and Accountability for a Better Ledger Economy Act), which systematically established the issuance thresholds, regulatory framework, and circulation boundaries for dollar stablecoins for the first time. As of now, the act has passed the review of the House Financial Services Committee on April 2 and is pending a vote in both the House and the Senate before it can officially become law. This not only responds to the long-standing regulatory vacuum in the stablecoin market but may also be a key step toward building the next generation of dollar payment network 'institutional infrastructure'.
So, what problem does this new act aim to solve? Do the differences with MiCA reflect the U.S. 'systemic strategy'? Is it paving the way for Web3 dollar hegemony?
These issues will be shared one by one by Mankun Lawyer in this article.
What kind of dollar stablecoin does the STABLE Act seek to establish?
According to the document, the newly launched stablecoin act attempts to establish a clear compliance framework specifically applicable to 'payment stablecoins'. We summarize its five core points:
1. Clarify regulatory objects, focusing on 'payment stablecoins'
The first step of the STABLE Act is to clarify the core regulatory objects: dollar-pegged stablecoins issued to the public that can be directly used for payments and settlements. In other words, those truly incorporated into the regulatory framework are the crypto assets used as 'dollar substitutes' on-chain, rather than all tokens claiming to be pegged to the dollar.
To avoid risk diffusion, the act explicitly excludes some high-risk or structurally unstable token models. For example, algorithmic stablecoins, partially collateralized stablecoins, or speculative 'pseudo-stablecoins' with complex circulation mechanisms are not within the scope of this act. Only stablecoins that achieve 1:1 dollar asset full backing, have a transparent reserve structure, and are intended for public daily transaction circulation are considered 'payment stablecoins' and need to comply with the regulatory arrangements under this act.
From this perspective, the real concern of the STABLE Act is not the 'technical carrier' of stablecoins, but whether it is building a 'dollar on-chain payment network'. It seeks to regulate the issuance method and operational basis of the 'digital dollar', rather than all tokens labeled with USD.
2. Establish a 'redemption right' mechanism, 1:1 dollar anchoring
In addition to regulatory entry thresholds and issuer qualification requirements, the STABLE Act particularly emphasizes the 'redemption rights' arrangement for stablecoin holders, meaning the public has the right to redeem stablecoins for fiat dollars at a 1:1 ratio, and issuers must fulfill this obligation at all times. This system arrangement essentially safeguards against stablecoins becoming 'pseudo-anchored assets' or 'internally circulating system tokens'.
At the same time, to prevent liquidity crises or run risks, the act also sets clear asset reserve and liquidity management requirements. Issuers must hold high-quality, easily convertible dollar assets (such as government bonds, cash, central bank deposits, etc.) in a 1:1 ratio and accept ongoing scrutiny from the Federal Reserve. This means stablecoin issuers cannot use 'user funds to invest in high-risk assets', nor can they use algorithms or other derivative structures to achieve 'anchoring'.
Compared to some earlier market models of 'partial reserves' and 'ambiguous disclosures', the STABLE Act writes '1:1 redeemable' into federal legislation, representing a higher requirement from the U.S. for the underlying credit mechanism of 'digital dollar substitutes'.
This not only addresses public concerns about stablecoins becoming 'unpegged' or 'collapsing' but also aims to create a system of institutional guarantees + legal trust for dollar stablecoins, supporting their long-term use in global clearing networks.
3. Strengthen fund and reserve regulation to avoid 'trust churn'
Based on the premise that 'stablecoins must be 1:1 redeemable', the STABLE Act further specifies the types, management methods, and auditing mechanisms of reserve assets, intending to control risks from the source and avoid the risks of 'surface anchoring and substantive churn'.
Specifically, the act requires all issuers of payment stablecoins:
Must hold an equivalent amount of 'high-quality liquid assets' (High-Quality Liquid Assets), including cash, short-term U.S. Treasury bonds, Federal Reserve account deposits, etc., to ensure user redemption requests;
Reserve assets must not be used for lending, investing, or for any other purposes, to prevent systemic risks arising from 'using reserve funds for returns';
Regularly undergo independent audits and regulatory reporting obligations, including reserve transparency disclosures, risk exposure reports, asset portfolio descriptions, etc., to ensure that both the public and regulatory agencies can understand the asset base behind the stablecoin;
Reserve assets must be stored separately in FDIC-insured banks or other compliant custodial institutions to prevent project parties from mixing them into their own funds.
This system arrangement aims to ensure that the 'anchoring' is real, auditable, and can be fully fulfilled, rather than 'anchoring in words, floating profits on-chain'. From historical experience, the stablecoin market has seen multiple credit crises arise from improper reserves, fund misappropriation, or lack of information disclosure. The STABLE Act aims to block these risk points at the institutional level, reinforcing the 'institutional endorsement' of dollar anchoring.
On this basis, the act also grants the Federal Reserve, Treasury, and designated regulatory agencies long-term supervisory authority over reserve management, including freezing non-compliant accounts, suspending issuance rights, and enforcing redemption, creating a relatively complete stablecoin credit closed loop.
4. Establish a 'registration system', bringing all issuers under regulatory oversight
The STABLE Act does not adopt a 'license classification management' approach in its regulatory path design, but establishes a unified registration system entrance mechanism, with the core point being: all institutions intending to issue payment stablecoins, regardless of whether they are banks, must register with the Federal Reserve and accept federal-level regulatory review.
The act sets two types of legitimate issuer paths: one is insured depository institutions regulated by federal or state authorities, which can directly apply to issue payment stablecoins; the second is non-depository institutions, which can register as stablecoin issuers as long as they meet the prudential requirements set by the Federal Reserve.
The act also particularly emphasizes that the Federal Reserve not only has the right to approve registrations but can also refuse or revoke registrations when it sees systemic risks. Furthermore, the Federal Reserve is also granted continuous review rights over all issuers' reserve structures, solvency, capital ratios, risk management policies, etc.
This means that all future issuances of dollar payment stablecoins must fall under the federal regulatory network, and no longer allow circumvention of scrutiny through 'only state registration' or 'technological neutrality'.
Compared to previous more relaxed multi-path discussion proposals (such as the GENIUS Act allowing starting under state regulation), the STABLE Act clearly demonstrates stronger regulatory unity and federal leadership, attempting to establish a legitimate boundary for dollar stablecoins through a 'national registration regulatory system'.
5. Establish a federal-level licensing mechanism, clarifying diverse regulatory paths
The STABLE Act also establishes a federal-level stablecoin issuance licensing system and provides diversified compliance paths for different types of issuers. This system arrangement not only continues the 'federal-state dual-track' structure of the U.S. financial regulatory system but also responds to market expectations for flexibility in compliance thresholds.
The act sets three optional paths for the issuance of 'payment stablecoins':
First, become a federally recognized payment stablecoin issuing institution (National Payment Stablecoin Issuer), directly subject to review and licensing by U.S. federal banking regulators (such as OCC, FDIC, etc.);
Second, as licensed savings banks or commercial banks issue stablecoins, they can enjoy higher trust backing, but must meet traditional bank capital and risk control requirements;
Third, operate based on state-level licensing, but must comply with federal-level 'registration + supervision', and meet uniform standards for reserves, transparency, anti-money laundering, etc.
The intent behind this institutional design is to encourage stablecoin issuers to register 'on-chain' legally, bringing them into the view of financial regulation, but not to implement a 'one-size-fits-all' approach that forces banking, thereby achieving controllable risks while protecting innovation.
In addition, the STABLE Act also grants the Federal Reserve (FED) and the Treasury broader coordinating powers to impose additional requirements on stablecoin issuance, custody, and trading based on systemic risk levels or policy needs.
In short, this system creates a multi-layered, multi-path, tiered regulatory compliance network for stablecoins in the U.S., improving system resilience and providing a unified institutional foundation for stablecoins going abroad.
Compared to MiCA, the U.S. has taken a different route
In the global stablecoin regulatory race, the European Union is the earliest to start and the most comprehensive in its framework. Its officially implemented (MiCA Act) in 2023 includes all crypto tokens backed by assets under regulatory oversight, through two types: 'EMT' (Electronic Money Token) and 'ART' (Asset-Referenced Token), emphasizing macro-prudence and financial stability, aiming to build a 'firewall' in the digital financial transformation.
However, the U.S. (STABLE Act) clearly chose another path: not to comprehensively regulate all stablecoins nor to build an all-encompassing regulatory system from the perspective of financial risk, but to focus on the core scenario of 'payment stablecoins' and institutionalize the construction of the next-generation payment network on the dollar chain.
The logic behind this 'selective legislation' is not complex—dollars do not need to 'dominate' in the stablecoin world; they only need to solidify the most critical scenarios: cross-border payments, on-chain transactions, and global dollar circulation.
This is also why the STABLE Act does not attempt to establish a MiCA-like comprehensive asset regulatory system, but focuses on 'on-chain dollars' that are 1:1 dollar supported, have actual payment functions, and can be widely held and used by the public.
From an institutional design perspective, the two present a stark contrast:
Different regulatory scopes: MiCA attempts to 'cover all', almost encompassing all stablecoin models, including those with extremely high risks; while the U.S. STABLE Act actively narrows the applicable scope, focusing only on assets that are genuinely used for payments and can represent the 'dollar function'.
Different regulatory objectives: The EU emphasizes financial order, systemic stability, and consumer protection, while the U.S. focuses more on legally clarifying which assets can serve as legitimate forms of 'on-chain dollars', thereby building a systemic dollar payment infrastructure.
Different issuing entities: MiCA requires stablecoins to be issued by regulated electronic money institutions or trust companies, almost locking the entrance within the financial institution system; whereas the STABLE Act establishes a 'new licensing mechanism' that allows compliant vetted non-bank entities to legally participate in stablecoin issuance, thus preserving the possibility for Web3 entrepreneurship and innovation.
Different reserve mechanisms: The U.S. requires 100% dollar cash or short-term government bonds, strictly excluding any leveraged or illiquid assets; the EU, on the other hand, allows various asset forms, including bank deposits and bonds, reflecting different degrees of regulatory rigor.
The adaptability to Web3 entrepreneurship varies: MiCA, due to its heavy reliance on traditional financial licenses and auditing processes, naturally creates high barriers for crypto startups; whereas the U.S. STABLE Act, while requiring strict compliance, leaves room for innovation, aiming to encourage the development of 'on-chain dollars' through compliance standards.
In short, the path taken by the United States is not one of 'comprehensive regulation', but rather a systemic path that filters 'qualified dollar payment assets' through compliance licenses. This not only reflects the change in the U.S. acceptance of Web3 technology but also serves as a 'digital extension' of its global monetary strategy.
This is also why we say that the STABLE Act is not merely a financial regulatory tool, but the beginning of the institutionalization of the digital dollar system.
Summary by Mankun Lawyer
'Making the dollar the benchmark unit for global Web3' may be the true strategic intent behind the (STABLE Act).
The U.S. government is trying to build a 'next-generation digital dollar network' that can be programmatically recognized, audited, and integrated through stablecoins, to comprehensively lay out the foundational protocols for Web3 payments.
It may not be perfect yet, but it is sufficiently important at present.
It is worth mentioning that at the international level, the IMF's (Balance of Payments Manual) seventh edition (BPM7), released in 2024, for the first time includes stablecoins in the international asset statistical system and emphasizes their new role in cross-border payments and global financial flows. This not only lays the foundation for the sovereign compliance of stablecoins with 'global institutional legitimacy' but also provides institutional support and external recognition for the U.S. to build a stablecoin regulatory system and strengthen the significance of dollar anchoring.
It can be said that the global institutional acceptance of stablecoins is becoming a prelude to sovereign competition in the era of digital currency.
As Mankun Lawyer observed: the compliance story of Web3 is ultimately a competition of institutional building, and dollar stablecoins are the most realistically significant battlefield in this competition.
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