Maxine Waters Introduces Bill for Regulating Stablecoin Issuers
In a significant move on February 10, Maxine Waters, the representative for California’s 43rd Congressional District, put forth an initial discussion draft of an unnamed bill aiming to establish a comprehensive regulatory framework for stablecoin issuers in the United States.
This proposed bill, which is the outcome of extensive bipartisan negotiations and technical guidance from both the Treasury Department and the Federal Reserve, sets out a licensing and regulatory framework specifically for payment stablecoin issuers. It delineates the necessary criteria for both nonbank and bank issuers, with a crucial aspect being the oversight role of the Federal Reserve in supervising these stablecoin issuers to ensure strict adherence to the proposed regulations.
Among its key provisions, the bill mandates that stablecoin issuers must fully back their coins on a one-to-one basis with reserves that could include US currency, insured deposits, short-term Treasury bills, or repurchase agreements backed by Treasury securities. Additionally, the bill strictly prohibits any unauthorized individual or entity from issuing a payment stablecoin in the US, with violators facing substantial penalties that could involve fines up to $1,000,000 or imprisonment for up to 5 years.
In an effort to fortify consumer protection measures, the bill also includes provisions that prevent non-financial companies from owning stablecoin issuers, ensuring a clear division between banking and commerce. In line with this focus on consumer protection, the bill requires rigorous compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) laws, subjecting issuers to US sanctions laws. Moreover, it bars individuals convicted of specific crimes, like Sam Bankman-Fried, from holding executive positions or significant shares in stablecoin issuers.
Granting enforcement authority to the Federal Reserve, the bill also maintains oversight of stablecoin-related activities, such as wallet providers, exchanges, and intermediaries, with existing regulators like the Treasury Department, the Consumer Financial Protection Bureau (CFPB), the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC) playing key roles in supervising these aspects.
Crafted with input from both Republican and Democratic congressional staff, this bill is hailed as a bipartisan endeavor to establish a balanced and effective regulatory framework for stablecoin issuers.
Congresswoman Waters expressed her stance on the draft bill, emphasizing its aim to foster innovation while addressing concerns about safeguarding consumers from fraud prevalent in the crypto industry.
Following Waters’ announcement, Republican representatives French Hill and Bryan Steil also unveiled their version of a payment stablecoin bill, titled the STABLE Act of 2025, indicating growing momentum for regulatory efforts in this arena. Parallel efforts are being undertaken in the Senate, with Senator Bill Hagerty introducing the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act on February 4.
Moreover, highlighting the widespread attention on stablecoin regulations, acting CFTC Chair Caroline Pham announced a CEO Forum on February 7, focusing on stablecoin regulations and tokenized non-cash collateral—a clear indication of the sector's importance and the drive toward comprehensive regulatory measures.