1. Maxine Waters unveils competing bipartisan stablecoin legislation

Representative Maxine Waters, a Democrat from California, has introduced a draft bill aimed at establishing a regulatory structure for stablecoins in the US. This legislative effort is the result of three years of bipartisan discussions during the previous Congressional term between Waters, the leading Democrat on the House Financial Services Committee, and Patrick McHenry (R-NC), the former Republican Chairman of the Committee.

Waters’ public announcement on February 10th followed shortly after the release of two stablecoin bills spearheaded by Republicans: the House’s STABLE Act of 2025 (Stablecoin Transparency and Accountability for a Better Ledger Economy Act), launched on February 6th, and the Senate’s GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act), presented on February 4th.

Notably, her announcement came just one day before the House Financial Services Committee convened a hearing titled “a golden age of digital assets.” This hearing was scheduled to address the STABLE Act and other proposed digital asset legislation.

In her official statement, Waters urged her colleagues in the House to endorse her bipartisan bill. She suggested that her proposal offers a more desirable path forward compared to the Republican-led legislation introduced in the new 119th Congress.

“This draft legislation is the product of years of dedicated bipartisan negotiation and collaboration with both regulators and industry participants. During the last Congress, Republican and Democratic Committee staff worked together to draft payment stablecoin legislation. This bill aims to establish a robust federal framework with consumer protection as a central priority,” Waters stated.

“This proposed bill encourages innovation while effectively managing and addressing the concerns I have consistently raised about protecting consumers in our nation from the scams that have plagued the cryptocurrency sector.”

In mid-2023, the Financial Services Committee advanced an earlier iteration of this legislation, known as the Clarity for Payment Stablecoins Act. This move was met with reservations from Waters, leading to continued negotiations throughout the past year. These discussions aimed to build consensus for a full House vote, ultimately culminating in the payment stablecoin bill Waters presented on February 10th.

“I strongly believe that the legislation I have introduced today provides the optimal foundation for progress and for enacting urgently needed stablecoin legislation into law,” Waters emphasized.

Key Features of the Bill

The proposed bill includes several important provisions, such as:

• Establishing a regulatory structure for both “depository institution stablecoin issuers” and nonbank stablecoin issuers, with a significant role assigned to the Federal Reserve.
• Implementing strong reserve requirements for stablecoin issuers.
• Ensuring that stablecoin issuers are subject to sanctions regulations and must comply with anti-money laundering and counter-terrorist financing laws.
• Addressing loopholes that could allow stablecoin issuers, such as Tether, to evade U.S. law by operating overseas.
• Implementing robust protections for consumer wallets, including requirements for risk management and financial resources.
• Preserving the existing authority and oversight of key regulatory bodies—the Treasury, the Consumer Financial Protection Bureau (CFPB), the Securities and Exchange Commission (SEC), and the Commodities Futures Trading Commission (CTFC)—over various aspects of stablecoin operations. This includes oversight of issuers, wallet providers, broker-dealers, exchanges that facilitate stablecoin trading, and other intermediaries involved in payment stablecoin liquidity.

This final provision is a key point of divergence from the recently discussed STABLE Act draft. The STABLE Act included an amendment specifically stating that “payment stablecoins are not securities,” effectively removing them from the SEC’s potential jurisdiction.

Gary Gensler, the previous SEC Chair, had suggested that some payment stablecoins might be classified as ‘securities’ under the Howey Test, thus falling under SEC oversight. This stance was evident in the SEC’s 2023 actions (and ongoing investigation) against Binance concerning the offering and sale of BUSD stablecoin tokens.

Waters’ bill would maintain the SEC’s ability to regulate stablecoins deemed to be securities, whereas the bill from Hill and Steil would completely exclude stablecoins from SEC authority.

However, a potentially more significant distinction between Waters’ payment stablecoin bill, formerly known as the Clarity for Payment Stablecoins Act of 2023, and the STABLE Act is the role of the Federal Reserve, which is notably minimized in the latter.

Major Differences Between the Bills

The most significant difference between these competing legislative proposals lies in which federal agency is designated as the primary regulator for stablecoins and their issuers.

Waters’ bill assigns a considerably larger role to the Federal Reserve. In contrast, the Republican-backed STABLE Act designates the Office of the Comptroller of the Currency (OCC)—a federal agency overseeing national banks and federal savings associations—as the primary regulator for nonbank stablecoin issuers. While the STABLE Act does grant the Federal Reserve a limited role to intervene in urgent situations, it requires a five-day advance notice.

This point of disagreement may not strictly follow party lines. The GENIUS Act, introduced in the Senate by Republican Senator Bill Hagerty (R-TN) on February 4th, presents a proposal more aligned with Waters’ bill. It suggests placing certain stablecoin issuers under the Federal Reserve system’s regulatory framework.

Beyond this central point of contention, other notable differences in Waters’ Stablecoin Bill include a proposal to bar certain individuals with criminal convictions, such as FTX’s Sam Bankman-Fried, from serving as executive officers or controlling more than 5% of shares in a stablecoin issuer. It also includes a mandate preventing “non-financial commercial companies,” like major technology corporations, from owning a stablecoin issuer.

Although these key differences, particularly concerning the primary regulatory authority over stablecoins, are significant, the various bills also share common ground. Rep. Hill’s announcement of the STABLE Act even indicated that it “builds on the efforts of former House Financial Services Committee Chair, Patrick McHenry, to create multiple regulatory pathways for payment stablecoin issuers within the United States.”

A Bill Facing Obstacles?

However, the practical impact of Waters’ bill may be limited, as the Republican-led STABLE Act is considered far more likely to pass in the Republican-majority House.

Adding to this likelihood is Rep. Hill’s position as the Financial Services Committee Chairman and Rep. Steil’s chairmanship of the newly formed Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence. Furthermore, Republicans hold a House majority with 218 seats compared to the Democrats’ 215.

In the House of Representatives, most bills require a simple majority, exceeding 50%, to pass a full vote. With 435 voting members in the House, this generally translates to at least 218 votes, assuming full attendance and voting from all members.

Essentially, if party lines hold, Republicans do not require support from Waters and her Democratic colleagues to pass their stablecoin bill. Moreover, both the STABLE Act and the GENIUS Act have already garnered some level of bipartisan support.

It remains possible that Hill and Steil might incorporate elements from Waters’ Stablecoin Bill into their STABLE Act during the legislative debate and refinement process. However, given the current climate of partisan politics in the U.S., a party holding a working majority in Congress—in this instance, the Republicans—may be less inclined to readily accept suggestions from across the political aisle.

Time is also a critical consideration; extended debate, feedback, input, and revisions will inevitably prolong the absence of stablecoin legislation in the United States. The flurry of activity in the early stages of the new Congress to produce stablecoin bills suggests a strong commitment from Capitol Hill to prioritize legislation in this area and to get a bill “on the President’s desk” within this year.

CoinGeek