U.S. House Commitee Clears STABLE Act as Trump Ties Stir Debate

The STABLE Act outlines several key provisions aimed at boosting consumer confidence and financial stability in the stablecoin sector. One of its core requirements is that stablecoin issuers must maintain a 1:1 reserve backing. This means that each stablecoin in circulation must be fully backed by assets such as U.S. dollars or U.S. Treasury securities, helping ensure that these digital tokens can reliably maintain their peg to the dollar.

The bill also imposes strict transparency and auditing standards. Issuers would be required to conduct regular audits and publicly disclose their reserves and operations, giving regulators and the public a clearer view into how these digital assets are managed. Additionally, stablecoin projects would be required to follow Anti-Money Laundering (AML) and Know Your Customer (KYC) rules, placing them under the same regulatory scrutiny as traditional financial institutions.

Representative Steil underscored the importance of the legislation by stating, “With the STABLE Act, we will secure the future of financial payments and continued dominance of the U.S. dollar as the world’s reserve currency.” His Republican colleague, Chairman French Hill, added that innovation in the fintech space “needs guardrails, not roadblocks.”

However, the bill’s advancement hasn’t been without controversy. Democrats on the committee raised concerns over potential conflicts of interest involving President Donald Trump and his family's deepening ties to the crypto industry. A crypto venture called World Liberty Financial (WLFI), co-founded by Trump’s sons, recently announced the launch of a stablecoin dubbed USD1. This development raised alarms among Democratic lawmakers, who accused the Trump family of using political power for personal financial gain.

Representative Maxine Waters, the committee’s ranking Democrat, criticized what she described as “multiple crypto schemes” tied to the Trump family and introduced amendments to the bill that would prevent sitting presidents and cabinet members from being involved in stablecoin ventures. Those proposals were ultimately voted down by the Republican majority, though the debate highlighted the political tension surrounding the crypto industry’s growing influence in Washington.

Despite those disputes, the STABLE Act managed to draw support from both sides of the aisle, with six Democrats voting in favor of the bill alongside Republicans. Its bipartisan momentum is a signal that lawmakers on Capitol Hill increasingly agree that a legal framework for stablecoins is necessary, even if there are disagreements about who should be allowed to participate in the industry.

Now that the STABLE Act has passed committee, it moves on to a vote in the full House of Representatives. Meanwhile, the Senate is developing its own approach through a competing bill known as the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. Lawmakers are working to reconcile the differences between the two proposals to create a unified regulatory approach.

As stablecoins become more deeply embedded in global finance, attracting interest from banks, tech firms, and institutional investors, the regulatory decisions made in Washington could have far-reaching consequences. Whether the final legislation leans more toward innovation or control, one thing is clear: stablecoins are no longer flying under the radar.