Sponsors (5)
The bill trades clearer federal rules, stronger custody and reserve-based protections, and greater oversight for payment stablecoins against reduced competition (especially for nonbank innovators), new compliance costs, potential gaps in investor protections, and shifts in supervisory authority that could raise legal and systemic risks.
Financial institutions, fintech firms, and applicants gain clear federal definitions, a designated federal supervisor, and an explicit licensing pathway that reduce regulatory uncertainty and create a predictable route to offer payment stablecoins.
People and businesses that use stablecoins will have stronger asset protections and redemption safety because issuers must maintain high-quality 1:1 reserves, provide monthly public reserve reports and audits, and custodial assets must be legally segregated for customers.
Bank and credit union customers gain clearer legal certainty that depository institutions can custody stablecoins and offer related services, enabling banks to provide crypto custody, distributed-ledger recordkeeping, and payment services.
U.S. startups, nonbank crypto firms, and smaller innovators are effectively barred or forced out of payment stablecoin issuance, reducing competition and likely raising fees and limiting consumer choice for payments.
Retail users and small businesses may lose investor-style protections because the bill removes stablecoins from securities/commodities frameworks and may limit SIPC/SIPA coverage, leaving customers exposed if intermediaries fail.
Narrowed supervisory authorities and procedural shortcuts (e.g., limited denial grounds, automatic approvals after deadlines) could allow inadequately vetted or undercapitalized issuers to enter the market, increasing systemic and operational risk.
Based on analysis of 16 sections of legislative text.
Establishes a federal licensing, reserve, custody, supervision, and insolvency-priority framework that requires permitted payment stablecoin issuers to back coins 1:1 with high-quality assets and bans unlicensed issuance.
Introduced February 4, 2025 by William Francis Hagerty · Last progress February 4, 2025
Creates a comprehensive federal regulatory regime for payment stablecoins: only licensed "permitted payment stablecoin issuers" may issue U.S. payment stablecoins, and those issuers must back outstanding coins 1:1 with high-quality assets, publish monthly reserve reports, submit to independent exams and executive certifications, and meet licensing, custody, and supervision standards. It also clarifies that payment stablecoins are not securities or commodities (as amended in several securities laws), requires federal-state supervisory coordination, sets custody segregation rules, gives stablecoin holders priority in insolvency, and directs studies and reporting on certain non‑collateralized and endogenous stablecoin designs.