New legislation has been introduced in both the House and Senate to regulate stablecoins in the United States. The bills aim to enforce strict reserve requirements, prohibit tech giants from issuing stablecoins, and close offshore loopholes.
The U.S. House Committee on Financial Services Democrats announced the introduction of a bipartisan bill on February 10th. Congresswoman Maxine Waters, the ranking member of the committee, unveiled the legislation after extensive negotiations and input from the U.S. Treasury Department and the Federal Reserve.
Waters emphasized that the bill focuses on consumer protection and has the potential to establish a comprehensive federal framework for stablecoin issuers. She stated:
“After years of bipartisan negotiation and collaboration with regulators and stakeholders, last Congress, the Republican and Democratic Committee staff jointly drafted payment stablecoins legislation that would create a strong federal framework and prioritize consumer protection.”
The legislation sets regulatory standards for both bank and nonbank stablecoin issuers, requiring strict reserve requirements and giving the Federal Reserve a central oversight role. It also prohibits non-financial commercial companies, including major technology firms such as Facebook, Google, and X, from owning stablecoin issuers in order to maintain the separation of banking and commerce.
In addition, the legislation enforces compliance with U.S. anti-money laundering and counterterrorism financing laws and closes loopholes that allow offshore entities like Tether to bypass U.S. regulations. Furthermore, the bill prohibits individuals convicted of financial crimes, including FTX’s Sam Bankman-Fried, from serving as executives or holding significant ownership in stablecoin issuers.
The introduction of Waters’ bill follows a bipartisan effort in the Senate. On February 4th, 2025, Senators Bill Hagerty, Tim Scott, Kirsten Gillibrand, and Cynthia Lummis introduced the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. This legislation aims to establish a clear regulatory framework for payment stablecoins by defining them as digital assets pegged to a fixed monetary value and setting licensing requirements for issuers. The bill includes reserve mandates, places federal oversight on issuers managing over $10 billion in stablecoins, and allows state-level regulation for smaller issuers. Supporters argue that the bill could improve transaction efficiency, promote financial inclusion, and strengthen the global status of the U.S. dollar.
