House Advances Stablecoin Bill—But Trump’s Ties Raise Alarms

The House Financial Services Committee passed a bill that would set levels for stablecoins. The STABLE Act, designed to improve oversight and transparency in the stablecoin market, passed with 32 votes in favor and 17 against during Wednesday’s hearing.

Committee Chair French Hill, R-Ark., emphasized the need for clear regulations, stating, “Stablecoins are evolving rapidly, and we must ensure the U.S. remains a leader in financial innovation while protecting consumers.”

The bill would prompt stablecoin issuers to keep reserves one-to-one and operate under anti money laundering rules, and abide capital standards. Attempts have been made by lawmakers to regulate the sector in the past, but the attempts did not go far because of political disagreements.

Concerns Over Trump’s Crypto Involvement

Compared to the fact that President Donald Trump was getting engaged in discussions surrounding the bill with his involvement in crypto, including DeFi projects, memecoins, NFTs, and Bitcoin mining operations, the discussions were even more difficult. There have been some lawmakers who have raised concerns regarding potential conflicts of interest.

“While these are difficult conversations as the president has had investments in digital assets, I think it is also important that we set up policies for fair and not tainted by personal investment,” said Hill.

But the detractors include Rep. Maxine Waters, D-Calif, who opposed the bill, saying it could give those with power an unfair advantage. “This legislation risks allowing high-level officials to set financial rules that benefit their own investments,” Waters stated.

Differences Between House and Senate Bills

Although the House and the Senate are both developing regulations for stablecoins, their proposals have significant differences. A primary concern is the regulation of foreign stablecoin issuers such as Tether.

The STABLE Act allows foreign stablecoin issuers to operate in the U.S. for two years before requiring them to comply with either U.S. regulations or a comparable foreign framework.

In contrast, the Senate’s version, the Guiding and Establishing National Innovation for US Stablecoin (GENIUS) Act, would ban foreign issuers from offering stablecoins in the U.S. but allows their tokens to circulate in secondary markets. The Senate bill also gives the Treasury Department additional authority to take action against foreign issuers.

Another point of debate is whether stablecoin issuers should be allowed to offer interest on their assets. Coinbase CEO Brian Armstrong commented on this issue, stating, “A competitive financial system should encourage innovation. If stablecoins can’t offer interest, it pushes development overseas.”

https://t.co/Y7JDtkRK1R

— Brian Armstrong (@brian_armstrong) March 31, 2025

Next Steps for Crypto Regulation

Lawmakers are also considering broader cryptocurrency regulations beyond stablecoins. A Republican aide familiar with discussions said the House Financial Services Committee is preparing to hold a hearing on a crypto market structure bill next week.

Rep. Bryan Steil, R-Wis., one of the bill’s sponsors, stressed that both the stablecoin and market structure bills should move forward together. “These two bills go hand in hand. If we want to create a strong financial framework, we need to address stablecoins and the broader crypto market at the same time,” Steil said.

Meanwhile, Circle, a major stablecoin issuer, has expressed strong support for the STABLE Act. Dante Disparte, Circle’s chief strategy officer, urged Congress to pass the bill, saying, “A well-defined regulatory framework would provide stability for the industry and ensure that U.S.-based stablecoins remain competitive.”

Ahead of tomorrow’s .@FinancialCmte markup of the STABLE Act, we must first commend Chairman .@RepFrenchHill and .@RepBryanSteil on how the bill achieves a clear America first standard when it comes to the issuance and circulation of dollar-denominated payment stablecoins. Clear…

— Dante Disparte (@ddisparte) April 1, 2025

As the bill progresses, debates over foreign issuer restrictions, interest-bearing stablecoins, and Trump’s connections to crypto are expected to shape its final version.