Maxine Waters publishes competing bipartisan stablecoin bill

Getting your Trinity Audio player ready...

United States Representative Maxine Waters (D-CA) has released draft legislation to create a regulatory framework for stablecoins. The bill is the product of three years’ worth of bipartisan negotiations during the last Congress between Waters, Ranking Member and leading Democrat of the House Financial Services Committee, and the Committee’s former Republican Chairman Patrick McHenry (R-NC).

Waters’ February 10 announcement came less than a week after the publication of two Republican-led stablecoin bills, the House Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act of 2025 and the Senate Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act; released February 6 and 4, respectively.

It also fell—uncoincidentally—a day before the House Financial Services Committee held a hearing titled “a golden age of digital assets” to discuss the STABLE Act and other digital assets legislation.

In her statement, Waters called on lawmakers in the House to support her bipartisan bill, suggesting that it would be preferable to the other legislation proposed by Republicans of the new (119th) session of Congress.

“After years of good-faith, bipartisan negotiation and collaboration with regulators and stakeholders, last Congress, the Republican and Democratic Committee staff jointly drafted payment stablecoins legislation that would create a strong federal framework and put consumer protection front and center,” said Waters.

“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.”

In mid-2023, the Financial Services Committee passed an earlier version of the bill called the Clarity for Payment Stablecoins Act, much to the displeasure of Waters. Therefore, negotiations continued last year to get support for a full House vote, resulting in the payment stablecoin bill published by Waters on February 10.

“I firmly believe that the legislation that I’ve unveiled today provides the best foundation for moving forward and getting urgently needed stablecoins legislation signed into law,” said Waters.

The specifics

In terms of the bill itself, its key provisions include:

• Creating a regulatory framework for both “depository institution stablecoin issuers” as well as nonbank stablecoin issuers, with a central role for the Federal Reserve;
• Strong reserve requirements;
• Subjecting issuers to sanctions laws and requiring compliance with anti-money laundering and counter-terrorist financing laws;
• Closing loopholes that would allow stablecoin issuers like Tether to circumvent U.S. law overseas;
• Robust protections for consumer wallets, including risk management and financial resource requirements;
• And protecting the existing authority and oversight of the Treasury, the Consumer Financial Protection Bureau (CFPB), the Securities and Exchange Committee (SEC), and the Commodities Futures Trading Commission (CTFC) over certain activities of stablecoin players, including issuers, wallet providers, broker-dealers, exchanges that facilitate stablecoins trading, and other intermediaries that maintain liquidity for payment stablecoins.

This last provision is a notable point of separation from the recent STABLE Act discussion draft, which explicitly included an amendment to clarify that “payment stablecoins are not securities,” thus removing them from the SEC’s potential jurisdiction.

Under previous SEC Chair Gary Gensler, there was a suggestion that certain payment stablecoins may fall under the definition of ‘security’ (based on the Howey test) and be subject to SEC oversight. This was clear from the agency’s 2023 (and ongoing) pursuit of Binance for the offering and selling of BUSD stablecoin tokens.

Waters’ bill would leave the SEC open to pursuing stablecoins it viewed as securities, while Hill and Steil’s bill would remove stablecoins entirely from the SEC’s purview.

But perhaps the key difference between Waters’ payment stablecoin bill—formerly the Clarity for Payment Stablecoins Act of 2023—and the STABLE Act is the role of the Federal Reserve, or lack thereof in the latter’s case.

Where the two bills diverge

The biggest area of contrast between the competing bills is which federal agency is delegated the primary regulatory authority for stablecoins and issuers.

Waters’ bill gives the Federal Reserve a far greater role, while Hill and Steil’s Republican draft makes the Office of the Comptroller of the Currency (OCC)—a federal agency that regulates and supervises national banks and federal savings associations— the regulator for nonbank stablecoins. The STABLE Act does give the Federal Reserve a very limited role in intervening in exigent circumstances, but with five days’ notice.

This point of contention may not be so clearly divided down party lines as in the other chamber of Congress, the GENIUS Act, published by Senate Republican Bill Hagerty (R-TN) on February 4, put forward a proposal more in line with Waters bill, in which certain stablecoin issuers would fall under the Federal Reserve system’s regulatory framework.

Outside of this core sticking point, the other main differentiators of Waters’ Stablecoin Bill are its proposal to ban certain convicted individuals, like FTX’s Sam Bankman-Fried, from serving as an executive officer or controlling more than 5% of the shares of an issuer, and a mandate prohibiting “non-financial commercial companies,” such as big tech firms, from owning a stablecoin issuer.

While some of these key differences are significant, mainly the matter of where ultimate regulatory authority over the stablecoin space will lie, the various bills have much in common, with Rep. Hill’s STABLE Act announcement even suggesting that it “builds on the efforts of former House Financial Services Committee Chair, Patrick McHenry, to provide multiple regulatory pathways for payment stablecoin issuers in the United States.”

A doomed bill?

However, much of this talk may be moot, as the Republican-led STABLE Act is far more likely to be passed by the Republican majority House.

On top of the fact that Hill is the Financial Services Committee Chairman and Steil is the Chairman of the shiny new Digital Assets, Financial Technology, and Artificial Intelligence Subcommittee, the Republicans hold a majority of 218 to 215 in the House.

In the House of Representatives, most bills require a simple majority (more than 50%) to pass a full vote. Since the House has 435 voting members, this typically means at least 218 votes, assuming all members are present and voting.

In other words, assuming all party members fall in line, the Republicans don’t need the support of Waters and her Democrat colleagues to pass their stablecoin bill. In addition, both the STABLE Act and the GENIUS Act already have some limited bipartisan support.

Hill and Steil could still decide to incorporate suggestions from Waters’ Stablecoin Bill into their own STABLE Act during the debate and finessing stage. However, it’s a sad fact that due to the recent temperature of partisan politics in the U.S., a party with a working majority in Congress—in this case, the Republicans—is less likely to be open to suggestions from their colleagues across the aisle.

Time is also a factor, and more debate, feedback, input and revision means more time spent without stablecoin legislation on the books in the United States. The frenzied activity early in the new Congress to churn out stablecoin bills suggests a clear intention from Capitol Hill to prioritize legislation in this area and get a bill “on the President’s desk” this year.

Watch: Blockchain is much more than digital assets