Lawmakers divided over state vs. federal oversight of stablecoin market.
Democrats Push Back Against Republican Stablecoin Bill
Democratic lawmakers are strongly opposing the Republican-led Stable Act, arguing that it weakens financial oversight and benefits Big Tech companies like Elon Musk’s X and Apple. During a House Financial Services Committee hearing, Representative Maxine Waters warned that the bill could allow tech giants to issue their own digital currencies, similar to Facebook’s failed Libra stablecoin project.
Concerns Over State-Level Regulation
A key provision in the bill allows stablecoin issuers to operate primarily under state rather than federal supervision. Representative Stephen Lynch criticized this, saying it would create a “race to the bottom” as states compete to attract issuers with lenient regulations. Democrats argue this could undermine consumer protections and jeopardize financial stability.
Republicans Push for Stablecoin Adoption
Republicans defend the bill, saying it reinforces the U.S. dollar’s global dominance and lowers transaction costs. Representative Andy Ogles highlighted that the U.S. has some of the highest payment transfer fees among G20 nations, urging for a faster and cheaper stablecoin-based system.
Trump’s Influence on Crypto Regulation
With Republicans holding majorities in both the House and Senate, the bill has a clear path forward. President Donald Trump has vowed to bring regulatory clarity to the crypto industry, further fueling GOP efforts to push the legislation through. His pro-crypto stance, including launching his own memecoin, has encouraged lawmakers to advance digital asset policies.
The Battle Over CBDCs and Stablecoin Alternatives
While Republicans champion stablecoins, they continue to oppose central bank digital currencies (CBDCs). Representative Tom Emmer introduced a bill last week to ban CBDCs, calling them an “Orwellian surveillance tool.” Democratic Representative Brad Sherman countered that the GOP’s opposition would eliminate a public alternative to corporate-controlled stablecoins, reinforcing the crypto industry’s dominance.
What’s Next for U.S. Stablecoin Regulation?
Despite pushback, Republican control of Congress gives the bill a strong chance of passing. However, bipartisan cooperation remains uncertain, as Democrats demand stronger consumer protections and financial oversight. The outcome will shape stablecoin regulation, financial innovation, and the broader digital asset market in the U.S.
Disclaimer:
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