- The US House committee approved a stablecoin bill with bipartisan support in a 32-17 vote.
- The bill mandates stablecoins be backed one-to-one with dollars or short-term government debt.
- Lawmakers debated Trump’s involvement in crypto, but the bill moved forward without restrictions.
The US House Financial Services Committee voted 32-17 to advance a bill aimed at regulating stablecoins. The legislation gained bipartisan support, with some Democrats joining Republicans in pushing it forward. The bill moves to the House floor for further consideration in the coming months. That comes as stablecoin regulation has become a priority for the cryptocurrency industry, especially after large spending in the 2024 election and backing from President Donald Trump.
Under the new proposed legislation, stablecoins are supposed to be backed one to one by US dollars or short-term government debt. This tries to create a regulatory basis on the federal and state levels, where it provides oversight but encourages growth in the field. However, there are disagreements over aspects of algorithmic stablecoins that don’t need traditional currency reserves.
Divided Views on Stablecoin Issuance and Oversight
The bill ignited debates among the committee members about who should be allowed to issue stablecoins. Then, Democrats brought forth an amendment barring Trump and tech companies from creating their own digital payment tokens. The proposal and a separate Democratic backed amendment to prevent taxpayer funded bailouts for failed stablecoin ventures were rejected by the committee.
Republicans and some Democrats say stablecoins can bring about faster and cheaper global transactions. Supporters think that there should be a clear regulatory structure for the industry so it remains in the US and protects the consumers. During the committee meeting, Chairman French Hill of Arkansas said that Innovation needs guardrails and not roadblocks.
A version of the bill passed in the Senate Banking Committee last month is very similar to this bill. Before sending a final version out to Trump for his approval, lawmakers will have to resolve differences. The big disagreement hinges on whether the oversight should be at the federal or state level, with some of the lawmakers calling for more flexibility.
Concerns Over Trump’s Involvement and Industry Impact
California representative Maxine Waters opposed the bill because of concerns that Trump and his family might be engaged in cryptocurrency ventures. She claimed that Trump has made his presidential tenure a means for touting crypto businesses that financially benefit him. Specifically, Waters mentioned World Liberty Financial, a crypto firm connected with Trump’s family, which is planning up its own stablecoin. She also warned against major technology companies such as Amazon, Meta, and Walmart gaining control of the digital payment systems.
Despite Waters’ objections, Representative Gregory Meeks of New York supported the bill, emphasizing the need for clear regulations. He acknowledged concerns about Trump’s role in crypto but argued that the industry requires certainty to operate effectively.
Banking groups have expressed reservations about the legislation. They warn that stablecoins could divert deposits from traditional banks, potentially reducing access to credit. Meanwhile, major retail organizations support the bill, seeing stablecoins as a potential competitor to credit card payment systems.
With backing from Trump and some Democrats, stablecoin regulation appears to be gaining momentum in Washington. The next steps will involve resolving remaining differences between the House and Senate versions before final approval.
