The US House Financial Services Committee has voted 32-17 in favor of a bill aimed at regulating stablecoins.
A few Democrats joined Republicans in supporting the measure, highlighting a rare bipartisan agreement on cryptocurrency legislation.
Stablecoin bill proposes asset-backed reserves
The proposed legislation requires stablecoins to be backed one-to-one by assets such as US dollars or short-term government debt. State or federal agencies would oversee compliance to ensure financial stability and consumer protection. Supporters argue that stablecoins provide faster and more cost-effective transactions than traditional banking systems. Republicans and some Democrats believe a regulatory framework will encourage cryptocurrency businesses to stay in the United States. The committee also voted down a proposal that would have barred taxpayer-funded bailouts for struggling stablecoin issuers.
Chairman French Hill from Arkansas advocated that innovation should follow regulations instead of encountering limitations. According to his perspective and supporters, stablecoins serve as a payment tool to advance international money transfers and support alternative systems outside classic banking institutions. Both versions of the bill in Congress show parallel characteristics with the Senate Banking Committee version, and legislators are working to unify their stance before presidential submission. A key point of debate is whether algorithmic stablecoins, which do not maintain reserves in a recognized currency, should be permitted. Lawmakers also disagree on balancing federal and state regulations, with many advocating for a flexible approach.
Maxine Waters opposes Trump’s involvement in stablecoins
Congresswoman Maxine Waters from California voiced her strong disapproval toward the exclusion of her amendment, which sought to ban Donald Trump and his family from establishing secure coin business ventures. Waters blamed Trump for launching cryptoOperation projects during his term to bring financial gains to his family members. She pointed to World Liberty Financial, a firm linked to Trump’s family, which intends to launch its stablecoin. Waters also raised concerns about the absence of conflict-of-interest restrictions, arguing that the bill could allow figures such as Trump, Elon Musk, and large corporations, including Amazon, Meta, and Walmart, to influence the stablecoin market.
Despite these concerns, Representative Gregory Meeks of New York, a senior Democrat, supported the bill. He emphasized the need for clear regulations to foster cryptocurrency growth, even though he remained skeptical of Trump’s potential involvement.
Banking industry and retail lobby express concerns
The financial industry expresses worry that stablecoins might cause people to withdraw deposits from banks and block loan opportunities. Stablecoin adoption on a large scale could lead to reduced funds operating within the banking system, which would impact liquidity according to banking institutions. A key retail organization stands behind the bill because stablecoins present a competitive option to current payment solutions, including credit cards. The process of passing legislation involving stablecoin regulation remains ongoing as officials continue debating its terms.