Congress deliberates legislation establishing a legal framework for stablecoins

The Trump Administration’s Executive Order on January 23, 2025, titled, “Strengthening American Leadership in Digital Financial Technology,” laid the groundwork for encouraging innovation to develop a digital economy. This, in turn, has encouraged legislative action, regulatory reforms, and other federal initiatives. In Congress, stablecoin legislation is actively under consideration in each of the House and the Senate. Both bills are designed to establish a legal framework for stablecoins used as a means of payment. They outline requirements for federal (or state) licensing and oversight, transparency and one-to-one reserve standards, redemption and consumer protection requirements, and anti-money laundering and know-your-customer (AML/KYC) compliance.

On February 4, 2025, Senator Hagerty (R-TN), joined by Chairman Scott (R-SC), Digital Assets Subcommittee Chair Senator Lummis (R-WY), and Senator Gillibrand (D-NY), introduced the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. The bill, as amended, took a major step on March 13, 2025, toward becoming law after passing the Senate Banking Committee in a bipartisan 18–6 vote. The amended bill in the form of S. 919 will now proceed to the Senate floor for further deliberation.

On February 6, 2025, House Financial Services Committee Chairman French Hill (R-AR) and Digital Assets, Financial Technology, and Artificial Intelligence Subcommittee Chairman Bryan Steil (R-WI) released a discussion draft of legislation. This bill establishes a framework for the issuance and operation of dollar-denominated payment stablecoins in the US, called the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act.

The House STABLE discussion draft was submitted to the Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence. The Subcommittee held a hearing, entitled, “A Golden Age of Digital Assets: Charting a Path Forward,” to discuss the content of the bill.

The STABLE Act draft builds on efforts of the last Congress, when a stablecoin bill passed the House Financial Services Committee. With respect to the current STABLE Act, the House Financial Services Committee will need to take additional action before the bill proceeds to the House floor.

In order to become law, both the GENIUS and STABLE bills will need to pass their respective chambers, be reconciled (should the House and Senate pass different bills), and be signed by the President.

At the White House crypto summit on March 7, President Donald Trump called on Congress to pass stablecoin legislation by the August 2025 recess. Whether the timeline is achievable could be impacted by several considerations including a potentially divided digital asset provider industry, including the banking industry, on the specific details of both the current House draft and the Senate bill. In addition, a third proposal that has been put forward by Representative Maxine Waters (D-CA) may factor into the timing and/or details of any bill that moves forward. The Waters proposal would, among other differences, require all issuers to be regulated at the federal level, as opposed to the other bill’s state-level option.

Once in law, the federal and/or state regulatory agencies would need to promulgate regulations to implement the law. The Senate bill requires that the Act be implemented not later than one year after the date of its enactment, including through appropriate notice and comment rulemaking and the promulgation of regulations as necessary. In the meantime, nonbank state-licensed money transmitters are permitted to issue stablecoins (that are not otherwise deemed to be a security under US law), as are national banks under current federal authority.