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Congress Moves to Regulate Stablecoins, Temporarily Bans Some Digital Assets
The US House Financial Services Committee has introduced a discussion draft aimed at establishing a clear regulatory framework for stablecoins. The proposed legislation, known as the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act of 2025, seeks to address financial stability concerns by imposing a temporary ban on certain types of digital assets.
As part of the bill, lawmakers are proposing a two-year moratorium on the issuance of endogenously collateralized stablecoins. These digital assets are backed solely by another digital asset issued or maintained by the same entity, raising concerns over liquidity, volatility, and potential market manipulation risks.
To better understand the risks and benefits associated with these digital assets, the legislation requires the US Treasury Department to collaborate with the Federal Reserve, Securities and Exchange Commission (SEC), and Office of the Comptroller of the Currency (OCC) in conducting a comprehensive study. The research will evaluate the technological design, governance structures, and reserve compositions of stablecoins, as well as their impact on financial markets and consumer protection.
The proposed framework also aims to define permissible stablecoin issuers, mandating that they are either insured depository institutions or qualified non-bank entities meeting strict capital, liquidity, and transparency standards. Moreover, the bill outlines new oversight mechanisms for these entities, including requirements for monthly financial disclosures, independent audits, and risk management protocols.
In a statement, Digital Assets Subcommittee Chairman Bryan Steil emphasized the importance of clear regulatory guidelines in promoting innovation while protecting consumers and investors. The proposed legislation offers an 18-month transition period before full enforcement to ensure a seamless transition.
The STABLE Act is not the first attempt by lawmakers to regulate stablecoins. A bipartisan group of senators introduced the Guiding and Establishing National Innovation (GENIUS) Act earlier this year, which similarly aims to establish a regulatory framework for these digital assets while promoting financial innovation.
It remains to be seen whether the proposed legislation will gain traction in the US legislative process, but it marks an important step towards addressing concerns surrounding the stability of stablecoins.
Source: cryptopotato.com
