Will U.S. Set Crypto’s ‘Gold Standard’ or Strangle Stablecoin Innovation?

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• House Committee reviews GENIUS Act April 2, allowing stablecoin issuers federal/state charters; mandates foreign compliance with U.S. reserves/AML rules.
• Bipartisan bill faces Democrat pushback over consumer protections; Warren/Waters oppose Big Tech issuing stablecoins without safeguards.

The U.S. House Financial Services Committee will review the GENIUS Act, a proposed stablecoin regulation bill, on April 2. The legislation, supported by lawmakers from both major parties, aims to establish rules for digital currencies pegged to traditional assets like the U.S. dollar. Senators Bill Hagerty (R-TN) and Tim Scott (R-SC) introduced the bill, which advanced through the Senate Banking Committee on March 13 with bipartisan approval.

The GENIUS Act allows stablecoin issuers to obtain federal or state regulatory charters based on their market size. Foreign issuers must comply with U.S. standards for reserve holdings, anti-money laundering (AML) protocols, and liquidity management. The bill also requires issuers to maintain assets matching the value of tokens in circulation.

The U.S. House Financial Services Committee is expected to consider stablecoin legislation on April 2, a priority for President Donald Trump and the crypto industry. Some critics argue the bill lacks sufficient consumer protections and advocate for a ban on stablecoin issuance by…

— Wu Blockchain (@WuBlockchain) March 21, 2025

Committee Chairman French Hill (R-AR) stated that regulated stablecoins could modernize payment systems and reinforce the dollar’s global role. He emphasized balancing industry growth with necessary oversight, avoiding excessive government intervention.

Critics, including Representatives Maxine Waters (D-CA) and Elizabeth Warren (D-MA), argue the bill lacks consumer protection measures. They oppose permitting technology firms to issue stablecoins, citing risks similar to those in traditional finance without equivalent safeguards.

Industry leaders and some lawmakers contend the bill addresses regulatory gaps, providing clarity for companies like Circle (issuer of USDC) and Paxos (issuer of USDP). Legal experts note the proposed reserve and AML rules align with practices already adopted by major stablecoin operators. Jeremy Hogan, a legal analyst, highlighted that the framework could streamline compliance while fostering financial inclusion through faster, cheaper transactions.

If passed, the bill would mark the first comprehensive federal regulation of stablecoins in the U.S. Its approval could influence global standards, as other jurisdictions monitor American policy developments. The House vote will determine whether issuers gain flexibility in choosing regulators or face stricter limitations advocated by Democratic opponents.

Debates center on balancing innovation with consumer security. Proponents argue clear rules prevent misuse and encourage responsible growth, while critics warn loopholes could expose users to risks like issuer insolvency or fraud.