The U.S. House Financial Services Committee has taken a big step toward regulating stablecoins by advancing the STABLE Act. But while the bill gained bipartisan support, it’s also stirring up political drama.
Democrats are raising concerns over Donald Trump’s involvement with World Liberty Financial (WLFI) and its USD1 stablecoin, questioning whether he could personally benefit from the very regulations he might influence as president.
Will the STABLE Act bring much-needed clarity, or will political tensions derail it?
Here’s what’s happening.
The committee passed the STABLE Act with a 32-17 vote, aiming to set clear rules for dollar-backed stablecoins. Introduced by Chair French Hill and Rep. Bryan Steil, the bill would require stablecoin issuers to maintain reserves and follow anti-money laundering (AML) rules. Lawmakers also highlighted the need to keep up with blockchain technology to stay competitive globally.
The bill moved forward after a heated discussion, with 26 Republicans and six Democrats voting in favor. However, some Democrats raised concerns over Trump’s growing connections to stablecoins – especially after WLFI launched its own, USD1. Given Trump’s past involvement in selling NFTs and memecoins like TRUMP, critics argue he could personally benefit from stablecoin regulations while in office.
Despite these concerns, Republicans are pushing to finalize stablecoin rules by August. Committee Chairman French Hill emphasized the need for “guardrails, not roadblocks” to support innovation. Meanwhile, Democrats, including Maxine Waters and Stephen Lynch, accused Trump of using his influence as president for personal financial gain- an allegation Republicans dismissed.
Stablecoins weren’t the only crypto issue discussed in Congress. Lawmakers also debated banning a U.S. central bank digital currency (CBDC) and creating a task force to fight crypto-related crimes. The Financial Technology Protection Act, which focuses on stopping illegal activities in crypto, passed unanimously.
However, the anti-CBDC bill was more divisive, with a 27-22 vote.
With both the House and Senate advancing stablecoin bills, lawmakers will now work to combine them into a single proposal for final approval. Meanwhile, Trump is expected to sign a resolution that overturns an IRS rule targeting DeFi, marking another victory for the crypto industry.
It remains to be seen whether stablecoin regulations will pass before the election – or how much influence Trump will have over them.
Coinbase CEO Brian Armstrong welcomed the progress, saying it would encourage innovation and keep the crypto industry in the U.S. Rep. French Hill also noted that many lawmakers already agree on the need for stablecoin regulations.
As the debate continues, Rep. Bryan Steil compared stablecoin and market structure bills to “peanut butter and jelly” – essential together. Circle’s Dante Disparte is also pushing for quick approval, especially as Circle prepares for its IPO.
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