Democrat Maxine Waters Proposes Stablecoin Regulation in Bipartisan Bill

On February 10, Maxine Waters, the representative for California’s 43rd Congressional District, introduced an initial discussion draft. The unnamed bill seeks to establish a regulatory framework for stablecoin issuers in the US.

It follows extensive bipartisan negotiations and technical guidance from the Treasury Department and the Federal Reserve.

Maxine Waters Pushes For Stablecoin Regulation

The proposed bill outlines a licensing and regulatory framework for payment stablecoin issuers. It details the criteria for both nonbank and bank issuers. A central feature is the Federal Reserve’s role in supervising stablecoin issuers. This ensures strict compliance with the proposed regulations.

The bill mandates that stablecoin issuers back their coins one-to-one with reserves. This includes US currency, insured deposits, short-term Treasury bills, or repurchase agreements backed by Treasury securities. 

It also prohibits any unauthorized individual or entity from issuing a payment stablecoin in the US. Violators would face significant penalties.

“Be fined not more than $1,000,000 for each such violation; (ii) imprisoned for not more than 5 years; or (iii) be fined as described in clause (i) and imprisoned as described in clause (ii),” the bill read.

In addition to regulatory oversight, the bill includes provisions designed to strengthen consumer protection. It prevents non-financial companies from owning stablecoin issuers, ensuring the separation of banking and commerce. 

The proposal also mandates strict compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) laws. Therefore, it subjects issuers to US sanctions laws.

Additionally, it bans individuals convicted of certain crimes, such as Sam Bankman-Fried, from holding executive positions or significant shares in stablecoin issuers.

The Federal Reserve would be granted enforcement authority. At the same time, existing regulators, including the Treasury Department, the Consumer Financial Protection Bureau (CFPB), the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC), would maintain oversight over activities related to stablecoins, wallet providers, exchanges, and intermediaries.

This bill is crafted with input from both Republican and Democratic congressional staff. Moreover, it is seen as a bipartisan effort to create a balanced, effective framework for stablecoin regulation.

“This draft bill fosters innovation, while properly addressing and prioritizing concerns I have long held about safeguarding our nation’s consumers from scams that have plagued the crypto industry,” said Congresswoman Waters.

Waters’ announcement followed a release by Republicans French Hill and Bryan Steil. The representatives introduced their version of a payment stablecoin bill just days earlier. The proposed bill is titled STABLE Act of 2025.

Meanwhile, efforts to regulate stablecoins are also underway in the Senate. On February 4, Senator Bill Hagerty introduced the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act.

Besides the bills, on February 7, CFTC Acting Chair Caroline Pham announced a CEO Forum with a key focus on stablecoin regulations. The forum will bring together major crypto companies to discuss and propose new policies for stablecoins and tokenized non-cash collateral.

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