Stablecoin legislation may be on shaky ground

When it comes to the specifics of draft bills, the industry isn’t on the same page

February 26, 2025 04:30 pm

US Senator Kirsten Gillibrand | Gage Skidmore/"Kirsten Gillibrand" (CC license)

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For years I’ve heard that stablecoins are going to be one of the first facets of crypto to become regulated.

We’ve seen a few stablecoin bills get introduced and marked up, but so far nothing has been passed. With Trump 2.0 and a Republican majority on the Hill, this may be the year we start to see some movement.

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But when it comes to specifics, the industry isn’t on the same page.

Some claim the latest drafts of stablecoin legislation prohibit non-US issuers from purchasing Treasurys. I wasn’t able to confirm this, and no draft I’ve seen has this language, but that doesn’t mean there aren’t lobbyists pushing this approach on Capitol Hill.

It’s no surprise that Circle (and Coinbase, according to people familiar) are pushing for a more US-forward approach to stablecoin legislation. USDC is the world’s second-largest stablecoin, so giving foreign issuers like Tether more hoops to jump through would be advantageous for Circle.

Republican Senators Tim Scott, Bill Hagerty and Cynthia Lummis earlier this month partnered with Democrat Kirsten Gillibrand on the GENIUS Act. It’s a stablecoin bill that, among other things, establishes reserve and liquidity requirements for payment stablecoin issuers.

Over in the House, Republicans French Hill and Bryan Steil released a discussion draft for the STABLE Act, which also stipulates that issuers must maintain 1:1 reserves and high liquidity.

No markups have been scheduled so far this session, but I’ve been told we could start to see movement as soon as next month. We’ll be curious to see which witnesses are called to testify.

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