The U.S. House Financial Services Committee passed the “Stablecoin Transparency and Accountability for a Better Ledger Economy Act”, shortened as the STABLE Act, on April 3rd, 2025, to regulate crypto stablecoins. This article guides you through the full details of the STABLE Act, covering its definition, implications, and a comparison with the GENIUS Act, a similar act on stablecoins. Let’s get started.
What is the STABLE Act?
STABLE Act intends to provide a clear regulatory framework for the payment of stablecoins, the digital assets pegged to the U.S. dollar, and serve as a medium of exchange. By supporting innovation, protecting consumers, and ensuring financial stability, the act provides clarity to the regulatory side of the digital payments ecosystem.
As an act that emphasizes transparency, it ensures monthly audits and clear disclosure of funds that the public can access. It authorizes stablecoin issuance to limited entities such as subsidiaries of insured depository institutions (banks), nonbank stablecoin issuers recognized by the authorities, and state-regulated issuers.
The initial “discussion draft” of the act was released on February 6th, 2025, by Digital Assets, Financial Technology, and Artificial Intelligence Subcommittee Chairman Bryan Steil (WI-01) and House Financial Services Committee Chairman French Hill (AR-02). The feedback provided by members and stakeholders improved the draft from its initial version.
Why the Need for the STABLE Act?
A bill like the STABLE Act is essential because stablecoins are becoming more and more popular in general financial transactions, and the lack of a unified legislative framework to regulate them will create issues with their security and accountability. The act fills almost all the shortcomings of stablecoins issued by non-bank institutions with no regulations.
Chairman Steil stated that the STABLE Act can help the U.S. secure the future of financial payments and support the dominance of USD as the world’s reserve currency. He added that the bill will implement a clear regulatory structure for payment stablecoins.
Chairman Hill expressed that their STABLE Act is a strong continuation of their work on digital assets, precisely a culmination of months of work, with important insights from the stakeholders and members. They consider it a critical step toward the interoperability of traditional finance and the digital blockchain system.
How is the STABLE Act Different from the GENIUS Act?
The GENIUS Act was introduced by Senators Bill Hagerty, Tim Scott, Kirsten Gillibrand, and Cynthia Lummis to create a legal structure for stablecoin payments. While both acts aim to regulate stablecoins, they differ in various layers, including the intention, licensing, and reserve requirements. Here is a comparison table between the two:
| Feature / Category | STABLE Act of 2025 | GENIUS Act of 2025 |
| Full Name | Stablecoin Transparency and Accountability for a Better Ledger Economy Act | Guiding and Establishing National Innovation for U.S. Stablecoins |
| Primary Focus | Consumer protection, financial stability, and unified oversight of payment stablecoins | Promoting innovation, clarity, and flexibility in payment stablecoin issuance |
| Issuer Eligibility | Only approved entities: bank subsidiaries, federal nonbank issuers, or state-regulated issuers | Same categories, but includes clearer paths for small issuers and state flexibility |
| 1:1 Reserve Backing Requirement | Mandatory, with specific asset types defined | Same, with detailed guidance on allowable reserve instruments |
| Prohibition on Rehypothecation | Yes, complete prohibition | Mostly prohibited, but allows limited rehypothecation under regulated conditions |
| Disclosure Requirements | Similarly, with monthly certifications and third-party audits | Stablecoin holders get priority in bankruptcy proceedings |
| Audit & Reporting | Monthly audits by registered public accounting firms | Same, plus penalties for false certifications |
| Federal vs. State Oversight | Monthly reserve reports, executive certification, and public redemption policy | Allows state-level oversight for issuers under $10B market cap, with conditional transition |
| Interoperability Standards | Not explicitly mentioned | Empowers regulators to develop interoperability standards with NIST |
| Treatment in Bankruptcy | Not specified | Stablecoin-related functions only, unless otherwise permitted |
| Endogenously Collateralized Stablecoins | Not addressed | Mandates a Treasury-led study on algorithmic stablecoins |
| Enforcement & Penalties | $100,000/day for unauthorized issuance, plus criminal penalties for misrepresentation | Similar penalties, more detailed cease-and-desist procedures, and removal powers |
| Approval Timeline | 120 days after complete application, otherwise automatically approved | Same timeline, with a structured appeals process |
| Innovation Incentives | Strong consumer focus, cautious approach | Balances innovation with safety; promotes small issuer entry and tech neutrality |
| Activity Limitations for Issuers | Stablecoin-related functions only unless otherwise permitted | Same, but explicitly allows supporting activities if regulator-approved |
| Exemptions from Securities/Commodities Law | Not clearly stated | Explicitly states that stablecoins are not securities or commodities |
Potential Impact of the STABLE Act
Since no stablecoin providers currently have a bank license, the STABLE Act can implement strict regulations on the issuers. With its monthly audits, clear advisory opinions, and enhanced consumer protection, the act enhances smooth fund transfers and decreases systemic risks.
However, some criticisms passing the act will initiate a downfall in both cryptocurrency markets and decentralized applications. Others criticize the act for moving towards the centralization of blockchain, contradicting its decentralized vision.
Final Thoughts
The STABLE Act arrives at a time when the need for payment stablecoin legislation is at its peak. Implemented effectively, it can become a model that other countries can follow.
However, we have to wait and see how the act will impact current stablecoin titans like USDT and USDC.