US releases bill to regulate stablecoins STABLE

The US bill would ban stablecoins from paying interest to users, although the yield from collateral assets would still be retained by the issuing organization.

After nearly 3 years of “freezing” since the first leaked version in 2022, the US Congress has finally officially released the full draft of the STABLE 2025 Act, the full name of which is the "Stablecoin Transparency and Accountability for a Better Ledger Economy Act".

The full draft of the STABLE Act of 2025 was released yesterday. Thread will a few takeaways below

No yield-bearing stables pic.twitter.com/2Jj03cDCG8

— Nick Cannon (@inkymaze) March 27, 2025

According to the draft, only banks, credit unions, and non-bank organizations licensed by the US Treasury Department are allowed to issue stablecoins. In addition, all legal stablecoins must be backed 1:1 by extremely safe and liquid assets such as cash, US Treasury bills with maturities of less than 93 days, or equivalent money market instruments.

The Act also prohibits the issuance of stablecoins that pay interest to users, which has caused many stablecoins to be classified as securities, and imposes penalties for any organization that violates the law with fines of up to $100,000 per day.

Must have 1:1 reserves of cash, T-bills (<93d), or other highly liquid, safe assets pic.twitter.com/KTRjwMBGMh

— Nick Cannon (@inkymaze) March 27, 2025

The highlight of the STABLE 2025 Act is the continued ban on algorithmic stablecoins not backed by real assets for 2 years from the law's effective date, similar to the ban that appeared in the 2022 draft after the LUNA-UST collapse.

This means that stablecoins like DAI, which operate on a decentralized model and are backed by crypto assets, will remain in a legal gray area and risk being deemed invalid without a new model.

The bill also prohibits any promotion of stablecoins as being insured by the US government – ​​such as using terms like “FDIC-backed” to avoid misleading users about the true safety of the asset.

Another notable point is the ability of US states to propose and apply their own regulatory mechanisms for stablecoins, as long as the regulations are as strict as or higher than the federal standards. This opens up the opportunity for crypto-friendly states like Wyoming or Florida to become stablecoin issuance hubs in the future, if they pass the certification process from the federal Treasury.

In addition, the draft also raises the issue of building interoperability standards, allowing stablecoins to operate uniformly across different blockchains. Federal agencies will coordinate with the National Institute of Standards and Technology (NIST) and related organizations to evaluate and, if necessary, issue common standards to help stablecoins operate interoperably.

In addition, the US Treasury will seek to sign agreements with countries with equivalent regulatory frameworks to promote cross-border transactions and ensure that USD stablecoins issued abroad are compatible with domestic systems.

However, many experts believe that the STABLE Act 2025 comes too late and still lacks many practical implementation elements. Notably, the main contents of the current draft are almost no different from the original proposal in 2022, meaning that after three years, the US has not yet brought stablecoins out of the legal gray area.

Meanwhile, in other countries such as Europe, the MiCA law has been passed, Singapore announced regulations on stablecoin issuance from 2023, and Hong Kong is also planning to license stablecoin issuing companies. In the US, despite having the largest market share in stablecoin issuance and circulation in the world, the whole industry is still "walking in the fog" due to the lack of clear laws.

Not only that, the fact that the bill has not yet been passed but is only at the draft level shows that the journey ahead is still very long. After being heard and adjusted by Congress, the STABLE Act still needs to be officially approved by the House and Senate, before being signed into law by the President. This process could take another 6 to 12 months, not to mention disputes over management rights between states, the Treasury Department and the Federal Reserve that could make things take even longer.

One of the most controversial points in the draft STABLE Act 2025 is the provision prohibiting stablecoins from paying interest to users, although the yield from collateral assets such as treasury bonds is still allowed to be retained by the issuer. This has raised questions for many in the community, Uniswap CEO Hayden Adams sarcastically said:

“For the benefit of users, but not sharing profits with them? This sounds ridiculous."

Elijah (@PossibltyResult) also said that although this regulation helps avoid the risk of breaking monetary policy, it actually sucks away the value that should belong to users, turning stablecoins into financial instruments that benefit the issuing organization.

Solana co-founder Anatoly Yakovenko even spoke up, saying: "The ban on stablecoins paying interest is really 'unbearable'."

In addition, many people quickly compared it to the report published by JPMorgan a day ago, in which the bank predicted that yield-bearing stablecoins would be an explosive trend with a market share expected to skyrocket from 6% to 50% of the entire market in the next few years. Therefore, many people raised a big question: "Is the US preparing to legalize an inevitable trend, or is it about to pass a law to stifle it from the beginning?"