Draft Legislation for Stablecoin Regulation

House Financial Services Committee Republican Chair French Hill, R-Ark., has released draft legislation aimed at regulating stablecoins as U.S. lawmakers advance rules for these digital assets.

Key Figures

Hill, alongside Rep. Bryan Steil, R-Wis., revealed a discussion draft concerning stablecoins on Thursday, building upon previous efforts within the House Financial Services Committee. Steil heads the committee’s panel focused on digital assets. Feedback on the draft is being sought prior to a hearing next week.

Objectives

Steil expressed that implementing a clear regulatory structure for payment stablecoins can foster innovation, strengthen the U.S. dollar’s status as the global reserve currency, and safeguard consumers and investors. He anticipates feedback from consumers, issuers, and stakeholders as they strive to establish clear regulations for this innovative technology.

Background

Lawmakers have been attempting to pass a stablecoin bill for several years, predominantly within the House. Former House Financial Services Committee Chair Patrick McHenry, R-N.C., was previously collaborating with Democrat Maxine Waters, D-Calif., to form a regulatory framework for stablecoins since 2022. A contentious issue in that bill was allowing state regulators to approve stablecoin issuances without needing Federal Reserve approval.

Changes in Discussion Draft

The newly proposed draft alters some aspects of the preceding stablecoin bill, granting the Office of the Comptroller of the Currency the power to “approve and supervise federally qualified nonbank payment stablecoin issuers,” rather than involving a federal pathway through the Federal Reserve.

Senate Action

In a related development, Sen. Bill Hagerty, R-Tenn., introduced a bill titled “Guiding and Establishing National Innovation for US Stablecoins.” This announcement preceded a press conference on Tuesday where lawmakers established a working group tasked with creating regulations for crypto and stablecoins, encompassing members from multiple committees.

Senate Banking Committee Chair Tim Scott, R-S.C., emphasized the importance of fostering innovation in the U.S. while ensuring consumer protection and advancing financial inclusion. He expressed eagerness to collaborate with Chairman Hill and House colleagues to develop a solution for President Trump’s consideration.

Republican Cooperation

While Hill and Steil’s draft is not a companion to Hagerty’s bill, both initiatives signal Republicans’ commitment to addressing crucial issues. They remarked that both approaches aim to provide robust consumer protections and transparency while ensuring federal and state pathways for stablecoin issuance, ultimately positioning the U.S. as a leader in digital finance.