The U.S. House Financial Services Committee has voted in favor of the STABLE Act, aimed at establishing rules for the regulation of stablecoins.
Structure of Stablecoins: New Rules for Issuers
The STABLE Act introduces specific rules for stablecoin issuers, which must now fully back their coins with approved reserves like cash or Treasury bills. This means that algorithmic stablecoins without real dollar backing are no longer permissible. Companies like Tether and Circle may benefit by gaining official recognition and regulatory clarity, leading to increased institutional trust and wider usage in the U.S. economy.
Stablecoins as a Tool for U.S. Dollar Dominance
Lawmakers believe that stablecoins can help strengthen the global role of the U.S. dollar. Congressman Dan Meuser stated that the STABLE Act will 'reinforce the U.S. dollar's status as the world's reserve currency.' The bill could make stablecoins a core part of the U.S. payment system, tied closely to strict dollar-backed rules. The U.S. does not want to fall behind in competition with countries like China regarding digital currencies.
Politics and Controversies Surrounding Tether
Despite progress, not everyone is satisfied. Top Democrat Maxine Waters raised concerns about potential conflicts of interest, accusing Donald Trump and his allies of using the bill to advance their own stablecoin ventures, such as World Liberty Financial. Political friction around crypto regulation remains evident, although some Democrats crossed party lines to support the bill, emphasizing the urgent need for rules in the crypto space.
The STABLE Act is a significant step toward formalizing the stablecoin industry in the U.S., albeit not without controversy. The future of stablecoin regulation will depend on how the Senate responds to this legislation.
