Senate Nears Vote on Stablecoin Regulation Amid House Discrepancies

The U.S. Senate is nearing a final vote on regulating stablecoins, a significant milestone for crypto legislation in Congress. However, Representative French Hill, chairman of the House Financial Services Committee, highlighted key differences between the Senate's bill and a similar effort in the House. These differences need to be resolved before the legislation can become law.

Hill noted that while the bills are substantially similar, there are notable discrepancies that require clarification. One significant difference is the House's stricter requirements on "reciprocity" of international regulation over foreign issuers of stablecoins that might trade in the U.S. This category is often associated with leading global tokens like Tether's USDT. Hill explained that under the House version, issuers must either be registered in the U.S. and fully compliant with stablecoin laws or operate in a jurisdiction recognized by the U.S. as having a substantially similar regulatory regime and enforcement.

Hill also mentioned that the House bill provides a clearer pathway for determining which entities at the state or federal level regulate the issuers, depending on their business models. Additionally, the two chambers have different approaches to allowing non-financial companies to issue stablecoins. The House version permits such companies to issue stablecoins under regulation by the Office of the Comptroller of the Currency, while the latest Senate version proposes banning certain public companies from issuing these tokens. Hill indicated that the Senate needs to clarify its approach on this matter.

Hill expressed optimism about the House's ability to deliver on President Trump's promises, referring to the president's wish to have the stablecoin and market-structure bills on his desk for signatures by the August congressional recess. He acknowledged the Senate's recent actions on its stablecoin legislation, the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, as "really important" for moving the effort forward. However, he also noted the years of paralysis in the Senate over crypto matters and the House's success in passing more complex crypto market oversight legislation in the last session.

Hill also addressed the political complexities introduced by President Trump's personal involvement with crypto businesses, including stablecoins. He stated that this involvement has made the legislative debate more complicated and distracting from the core work. Despite these challenges, Hill remains optimistic about the progress of stablecoin legislation in Congress.

In U.S. lawmaking, both the Senate and the House must agree on identical versions of a bill before it can be signed into law by the president. If the Senate approves its stablecoin bill, the House has the choice of voting on that same language or pursuing its own. If different versions are passed, they would need to be reconciled into a compromise version that requires another round of approvals in each chamber. The stablecoin legislation has cleared the Senate Banking committee and early procedural votes on the floor with massive bipartisan support but faced delays due to objections from Democrats regarding safeguards for illicit activity and the involvement of public officials in crypto businesses.