"Waters Proposes Bipartisan Stablecoin Regulation Bill"

Democrat Maxine Waters Proposes Stablecoin Regulation in Bipartisan Bill

On February 10, Representative Maxine Waters introduced a bipartisan bill to establish a regulatory framework for stablecoin issuers in the US. The unnamed bill follows extensive negotiations and technical guidance from the Treasury Department and the Federal Reserve.

The proposed bill outlines a licensing and regulatory framework for payment stablecoin issuers, detailing the criteria for both nonbank and bank issuers. A central feature is the Federal Reserve's role in supervising stablecoin issuers, ensuring strict compliance with the proposed regulations.

The bill mandates that stablecoin issuers back their coins one-to-one with reserves, including US currency, insured deposits, short-term Treasury bills, or repurchase agreements backed by Treasury securities. It also prohibits unauthorized individuals or entities from issuing a payment stablecoin in the US, with violators facing significant penalties.

In addition to regulatory oversight, the bill includes provisions designed to strengthen consumer protection. It prevents non-financial companies from owning stablecoin issuers, ensuring the separation of banking and commerce. The proposal also mandates strict compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) laws, subjecting issuers to US sanctions laws.

Additionally, the bill bans individuals convicted of certain crimes, such as Sam Bankman-Fried, from holding executive positions or significant shares in stablecoin issuers. The Federal Reserve would be granted enforcement authority, while existing regulators, including the Treasury Department, the Consumer Financial Protection Bureau (CFPB), the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC), would maintain oversight over activities related to stablecoins, wallet providers, exchanges, and intermediaries.

This bill is crafted with input from both Republican and Democratic congressional staff, seen as a bipartisan effort to create a balanced, effective framework for stablecoin regulation.

Congresswoman Waters stated, "This draft bill fosters innovation, while properly addressing and prioritizing concerns I have long held about safeguarding our nation’s consumers from scams that have plagued the crypto industry."

Waters' announcement followed a release by Republicans French Hill and Bryan Steil, who introduced their version of a payment stablecoin bill just days earlier. The proposed bill is titled STABLE Act of 2025.