US House Passes STABLE Act 2025, Mandating 1:1 Reserve for Stablecoins

The US House Committee on Financial Services has made a significant move in the regulation of stablecoins by advancing the STABLE Act of 2025. This bipartisan legislation underscores the growing recognition of the challenges and opportunities presented by the expanding stablecoin sector. Financial analyst Janet H. highlighted the importance of this act, stating that it is crucial for stablecoins to maintain their position within the broader financial ecosystem amidst increasing regulatory scrutiny.

The STABLE Act of 2025 is designed to strengthen the regulatory framework for stablecoins, ensuring transparency and accountability. On March 13, the US House Financial Services Committee passed the STABLE Act of 2025 with a vote of 32-17. This act requires all issuers to maintain a 1:1 reserve backing for their coins, along with strict anti-money laundering (AML) requirements and regular audits. Chairman French Hill emphasized the importance of this legislation, stating that it positions the US to uphold the integrity of the dollar in a shifting global financial landscape. The bipartisan passage of the act reflects a growing consensus on the need for regulation, especially as traditional financial institutions increase their involvement in the cryptocurrency space.

This legislative development coincides with efforts in the Senate, where the GENIUS Act was approved with an 18-6 vote. This indicates that regulatory bodies are actively prioritizing stablecoin governance. The passage of these acts suggests that discussions will continue to align their provisions smoothly, ensuring a cohesive regulatory approach.

The advancement of the STABLE Act comes at a time of intensifying competition in the stablecoin sector. As established banks and new fintech companies introduce their stablecoin solutions, the market dynamics are shifting. For example, the recent Memorandum of Understanding (MoU) between Sumitomo Mitsui Banking Corporation and Fireblocks aims to explore stablecoin usage in financial services across various jurisdictions. Additionally, the CEO of Bank of America has expressed intentions to introduce a proprietary stablecoin, contingent upon the establishment of appropriate regulatory frameworks. This evolving scenario is further supported by the approval granted to national banks by the Office of the Comptroller of the Currency to engage in stablecoin transactions and crypto custody services, signaling regulatory endorsement of the market’s growth.

Moreover, the launch of several state-backed and private stablecoins, such as Wyoming’s WYST and World Liberty Financial’s USD1, underscores a critical shift towards broader acceptance and adoption in both governmental and commercial sectors. While the stablecoin market is flourishing, it faces challenges. The accelerated competition has raised the stakes, as less compliant stablecoins may face exclusion from the market. Accusations of insolvency from notable figures like Justin Sun towards First Digital Trust have raised concerns regarding transparency and resilience among current stablecoin offerings. Such claims have already led to market ramifications, evidenced by the temporary depegging of First Digital USD (FDUSD) following Sun’s allegations. This growing scrutiny will likely result in a tighter economic environment wherein only the most robust and compliant stablecoins will be able to sustain their market presence.

The passage of the STABLE Act of 2025 marks a transformative moment for the stablecoin industry, implementing essential safeguards aimed at ensuring trust and stability. As the legislative framework evolves, stakeholders will need to closely monitor the balance between innovation and regulation. The ultimate landscape may witness a consolidation where only the most resilient stablecoin projects thrive in compliance with the new regulatory expectations.