Forward the Original Title‘Quick Look! A Complete Overview of 15 Q&As on the Latest U.S. Stablecoin Bill’

Who can issue payment stablecoins? What are the core requirements for issuing them? Are there restrictions on foreign stablecoins entering the U.S.?

This week, Bryan Steil, Chairman of the U.S. Subcommittee on Digital Assets, and French Hill, Chairman of the House Financial Services Committee, officially introduced the draft STABLE Act of 2025, which outlines a framework for issuing and operating payment stablecoins in the United States. French Hill noted, “This bill is the result of months of collaboration between members of Congress and key stakeholders, both during this session and the last.”

This article breaks down the bill through 15 frequently asked questions and answers, helping readers fully understand its objectives, issuer and custodian obligations, and broader regulatory implications.

Who Proposed the Bill? What Is Its Purpose?

Who introduced the bill?

The draft bill, also known as the “Stablecoin Transparency and Accountability for a Better Level Economy Act of 2025”, was introduced by Representatives Bryan Steil and French Hill. Bryan Steil is the Chairman of the House Administration Committee and also serves as Chair of the Subcommittee on Digital Assets within the House Financial Services Committee. French Hill is the new Chairman of the House Financial Services Committee.

What type of stablecoins does the bill primarily regulate?

The bill aims to establish a regulatory framework to ensure transparency and accountability for payment stablecoins, regulate their issuance and circulation, protect consumers, safeguard financial stability, prevent illicit financial activity, and promote the use of stablecoins in a “better ledger economy.”

What is a Payment Stablecoin?

According to the bill, a payment stablecoin is defined as:

• A digital asset intended to be used as a means of payment or settlement.
• Denominated in a national currency.
• The issuer is obligated to redeem, repurchase, or exchange the stablecoin at a fixed monetary value.
• It is not considered a national currency, nor is it a security issued by an investment company.

Stablecoin Issuance

Who can be approved to issue payment stablecoins?

Only Permitted Payment Stablecoin Issuers are allowed to issue stablecoins. These include:

• Subsidiaries of insured depository institutions that have been approved
• Federally licensed non-bank payment stablecoin issuers
• State-licensed payment stablecoin issuers

What are the core requirements for issuing payment stablecoins?

• Reserve Requirements: Issuers must hold reserve assets no less than 100% of the outstanding amount of stablecoins (1:1 backing). Eligible assets include U.S. dollar cash, Federal Reserve bank deposits, demand deposits with insured depository institutions, short-term U.S. Treasury securities (maturing within 93 days), certain overnight repurchase agreements, and money market funds invested in the above assets.
• Redemption Policy: Must publicly disclose redemption terms and establish procedures to ensure timely redemption.
• Transparency: Monthly reports on reserve composition must be published, reviewed by an independent, registered public accounting firm, and certified in writing by both the CEO and CFO.
• Consequences of False Certification:

Willful violation: Up to 20 years imprisonment + $5 million fine

Negligent violation: Up to 10 years imprisonment + $1 million fine

• Capital and Risk Management: Must comply with capital, liquidity, and risk management standards (including operational, compliance, IT, and cybersecurity risks) set by the primary federal stablecoin regulator.
• Business Restrictions: Activities are primarily limited to issuing and redeeming stablecoins, managing reserves, and providing custody or direct support functions.
• No Interest Payments: Issuers are prohibited from paying interest or yield to holders of stablecoins.

Custody

What are the qualification requirements for custodians?

Only financial institutions (such as banks or trust companies) that are federally or state-regulated and meet relevant standards may provide custody services.

What custody rules does the bill include?

• Client assets must be segregated and cannot be commingled with the institution’s own funds.
• Customer assets must be prioritized over issuer creditors.
• Client assets cannot be recorded on the custodian’s own balance sheet.
• Custodians must regularly submit documentation outlining their operational procedures to regulators.

Regulation and Compliance

Who is responsible for regulating stablecoin issuers?

The primary federal payment stablecoin regulators include the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board, the Federal Deposit Insurance Corporation (FDIC), and the National Credit Union Administration (NCUA). Specifically:

• For insured depository institutions (non-credit unions) and their subsidiaries: the appropriate federal banking agency
• For insured credit unions and their subsidiaries: the NCUA
• For federally licensed non-bank payment stablecoin issuers: the OCC

How can individual states establish their own stablecoin regulatory frameworks?

State-qualified stablecoin issuers may only issue payment stablecoins under the supervision of their respective state’s stablecoin regulatory authority. Each state regulator can submit certification to the U.S. Department of the Treasury, demonstrating that their regulatory framework meets or exceeds federal standards.

What are the requirements for foreign stablecoin issuers?

The bill allows foreign-issued payment stablecoins to circulate in the U.S., but only under strict conditions:

• The issuer’s regulatory regime must be comparable to that of the U.S
• The issuer must agree to U.S. regulatory oversight, including reporting and examination requirements.

The Secretary of the Treasury is responsible for evaluating and coordinating international agreements, and must publish and update a list of countries deemed eligible.

• If the issuer is a non-bank entity, eligibility is determined by the OCC
• If the issuer is a bank or a bank subsidiary, eligibility is determined by the Federal Reserve

What are the penalties for violating the STABLE Act?

If a payment stablecoin issuer—whether a licensed issuer, an affiliated party, or an unauthorized issuer—violates the provisions of the STABLE Act of 2025, they may face a range of severe penalties enforced by federal or state regulators:

1.Regulatory Enforcement Actions

• Suspension or Revocation of License: If the primary federal payment stablecoin regulator determines that a licensed issuer or its affiliated party has committed a serious violation of the Act, it may prohibit the issuer from continuing to issue payment stablecoins.
• Cease and Desist Orders: If regulators reasonably believe that an issuer or its affiliated party is violating, has violated, or intends to violate the Act, applicable regulations, formal agreements, or written conditions, they may issue an order requiring the issuer to stop the offending behavior and take corrective action.
• Removal and Prohibition from Participation: The primary regulator may remove an affiliated party or bar them from participating in the affairs of the issuer or any other licensed issuer—if that party is found to have directly or indirectly violated the Act, related rules, or anti-money laundering laws under the U.S. Code.

2.Civil Penalties

• Unlicensed Issuance: Any entity issuing payment stablecoins without approval—along with affiliated parties who knowingly participate—can face civil penalties of up to $100,000 per day, for each day the stablecoin remains outstanding.
• Tier 1 Violations: If a licensed issuer or its affiliate substantially violates the Act, its rules, or any regulatory orders or agreements, they may be fined up to $100,000 per day.

Tier 2 Violations: If the violation is intentional, an additional penalty of up to $100,000 per day may be applied on top of Tier 1 fines.

3.Criminal Penalties

False Reserve Certifications: If an issuer’s CEO or CFO submits a monthly reserve report containing material false information, the following apply:

• If they knowingly submit a false report: up to $1 million in fines, 10 years in prison, or both
• If the false report is deliberately falsified: up to $5 million in fines, 20 years in prison, or both

False Claims of Insurance Coverage: If an issuer falsely claims that a stablecoin is guaranteed by the U.S. government or insured by the FDIC or NCUA, it will be prosecuted under existing federal law.

Civil Penalties:

• Unlicensed issuance or violations of sales restrictions: up to $100,000 per day.
• Substantial violations: up to $100,000 per day.
• Knowing (willful) violations: an additional fine of up to $100,000 per day.

Criminal Penalties: False reserve certifications: Up to $5 million in fines and up to 20 years in prison.

Regulatory Measures:

• Suspension or revocation of issuance license
• Issuance of cease and desist orders
• Removal of affiliated persons

Misleading Claims Penalty: False insurance statements will be prosecuted under applicable federal law.

Interim/Emergency Measures: Temporary cease and desist orders may be issued in urgent situations.

Other Questions

Are payment stablecoins considered securities?

The bill explicitly excludes payment stablecoins from the definition of “securities.”

How will stablecoin interoperability be ensured?

Federal regulators will evaluate, and may develop, standards to promote interoperability and compatibility of payment stablecoins—potentially in collaboration with agencies such as the National Institute of Standards and Technology (NIST).

When will regulators publish implementation rules?

Within 180 days (about 6 months) of the bill’s enactment, the primary federal regulators must jointly publish detailed rules for issuing payment stablecoins.

When does the bill take effect?

• For unlicensed issuers: Issuing payment stablecoins becomes illegal immediately upon enactment of the bill.
• For custodial intermediaries: Selling or providing payment stablecoins not issued by a licensed issuer becomes prohibited two years after enactment, allowing a transition period.
• The approval process for subsidiaries of insured depository institutions or non-bank entities to issue stablecoins will take effect on the earlier of:

12 months after the bill’s enactment, or

120 days after final regulations under Section 5 are published by the primary federal stablecoin regulator.

• The prohibition on algorithmic (endogenously collateralized) stablecoins takes effect immediately upon enactment and remains in place for two years.

The draft bill has been submitted to the House Financial Services Committee and is scheduled for official review and markup on Wednesday, April 2. After that, it may advance to a full House vote and be coordinated with the Senate version. If approved by both chambers, it will be sent to the President for signature.

Disclaimer:

1. This article is reprinted from [ForesightNews]. Forward the Original Title‘Quick Look! A Complete Overview of 15 Q&As on the Latest U.S. Stablecoin Bill’. The copyright belongs to the original author [KarenZ, Foresight News]. If there are any objections to the reprint, please contact the Gate Learn team. The team will handle the matter promptly in accordance with relevant procedures.

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