This week, Bryan Steil, chairman of the U.S. Digital Assets Subcommittee, and French Hill, chairman of the House Financial Services Committee, formally proposed the draft of the STABLE Act of 2025, which establishes a framework for the issuance and operation of payment stablecoins in the United States. French Hill said, This bill is the culmination of months of cooperation between this and the previous Congress and stakeholders and members.
This article uses 15 frequently asked questions and their answers to help you fully understand the purpose of the Act, the relevant requirements for issuers and custodians, and regulatory compliance issues.
Who proposed it? What is the purpose?
Who proposed this bill?
The draft bill, also known as the Stablecoin Transparency and Accountability for the Ledger Economy Act of 2025, was proposed by Representatives Bryan Steil and French Hill. Bryan Steil is the Chairman of the House Administration Committee and the Chairman of the Crypto Subcommittee of the U.S. House Financial Services Committee. French Hill is the new Chairman of the U.S. House Financial Services Committee.
Which types of stablecoins are mainly used to regulate?
The bill aims to ensure transparency, accountability, issuance and circulation of payment stablecoins through a regulatory framework, protect consumers, ensure financial stability, and prevent illegal financial activities, while promoting the use of stablecoins in a better ledger economy.
What is a Payment Stablecoin?
The bill defines payment stablecoins as:
A digital asset intended to be used as a means of payment or settlement
Denominated in national currency.
The issuer is obliged to exchange, redeem or repurchase the bonds for a fixed amount of monetary value.
It is not a national currency and is not a security issued by an investment company.
Stablecoin issuance
Who can be allowed to issue payment stablecoins?
Only “Permitted Payment Stablecoin Issuers” can issue stablecoins, including:
Approved insured depository institution subsidiaries
Federally certified non-bank payment stablecoin issuer
State-certified payment stablecoin issuer
What are the core requirements for issuing payment stablecoins?
Reserve requirements: The issuer must hold reserve assets of no less than 100% of the total outstanding stablecoins (1:1 support), mainly including U.S. dollar cash, deposits at the Federal Reserve Bank, demand deposits at insured depository institutions, short-term U.S. Treasury bonds (maturity within 93 days), overnight repurchase agreements under certain conditions, and money market funds invested in the above assets.
Redemption Policy: Publicly disclose the redemption policy and establish procedures for timely redemptions.
Transparency: Reserve composition reports are published monthly and reviewed by an independent registered accounting firm with written certification from the CEO and CFO.
Consequences of false certification:
Willful violation: up to 20 years in prison + $5 million fine;
Negligent violation: Up to 10 years in prison + $1 million fine.
Capital and Risk Management: Comply with capital, liquidity, risk management (including operations, compliance, IT, cybersecurity), and other requirements established by major federal payments stablecoin regulators.
Business restrictions: Mainly limited to direct support activities such as issuing and redeeming stablecoins, managing related reserves and providing custody.
No interest payments: No interest or earnings may be paid to stablecoin holders.
Hosting
What are the qualification requirements for relevant custodian institutions?
Only financial institutions (such as banks and trust companies) that are regulated by the federal or state government and meet relevant standards can provide relevant custody services.
What does the Act require regarding custody?
Customer assets must be isolated and must not be mixed with own funds.
Customer assets take precedence over issuer creditors.
It is prohibited to include customer assets in ones own balance sheet.
Submit descriptions of custody operation procedures to regulatory authorities on a regular basis.
Regulation and Compliance
Who is responsible for regulating stablecoin issuers?
The main federal payment stablecoin regulators are 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).
For insured depository institutions (not credit unions) and their subsidiaries: the appropriate federal banking agency
For insured credit unions and their subsidiaries: National Credit Union Administration
For federally certified non-bank payment stablecoin issuers: Office of the Comptroller of the Currency.
How can states establish their own stablecoin regulatory regimes?
State qualified payment stablecoin issuers can only issue payment stablecoins under the supervision of the relevant state payment stablecoin regulator. State regulators can submit certifications to the U.S. Treasury Department to prove that their regulatory systems meet or exceed federal standards.
What are the regulations for foreign stablecoin issuers?
The bill allows foreign payment stablecoins to circulate in the United States, but they must meet strict conditions: the regulatory system must be comparable to that of the United States, and the issuer agrees to accept reporting and inspection requirements determined by U.S. regulators. The Secretary of the Treasury is responsible for evaluating and coordinating international cooperation and publicly updating the list of eligible countries.
If the issuer is a non-bank entity, it will be determined by the Office of the Comptroller of the Currency; if the issuer is a banking institution or its subsidiary, it will be determined by the Federal Reserve.
What are the penalties for violating the Act?
What penalties will the issuer of a payment stablecoin face if it violates the Stability Act?
According to the STABLE Act of 2025, if a stablecoin issuer (including a licensed issuer and its affiliates) or an unlicensed issuer violates the provisions of the Act, they will face a series of severe penalties, which will be enforced by the corresponding federal or state regulators:
1. Regulatory enforcement measures:
Suspension or Revocation of Issuance: If the primary federal payments stablecoin regulator determines that the issuer or its institutional affiliates have materially violated this Act, it may prohibit a licensed issuer from continuing to issue payments stablecoins.
Cease-and-desist order: If the primary federal payments stablecoin regulator has reasonable grounds to believe that an issuer or its institutional affiliate is violating, has violated, or is attempting to violate this Act, regulation, order, written agreement, or condition, it may order it to cease and desist from such violative conduct or practice and take affirmative action to correct the circumstances resulting from the violation.
Removal and Debarment: The primary federal payment stablecoin regulator may remove an institutional affiliate of an issuer or debar it from further involvement with the issuer or all licensed issuers upon a determination that: the affiliate has directly or indirectly violated or attempted to violate this Act, regulation, or order; or violated anti-money laundering laws under the United States Code.
2. Civil penalties
Unlicensed Issuance: Any entity (and its affiliates that knowingly engage in the issuance of an unauthorized payment stablecoin) will be subject to a civil penalty of up to $100,000 per day for each day that such payment stablecoin is outstanding.
First-degree violations: A civil penalty of up to $100,000 per day for each material violation of the Act, a related regulation, an order, or a written agreement/condition by the licensee or its affiliates.
Second-Tier Violations: If a licensed issuer or its affiliates knowingly engage in a violation of the Act or a related regulation/order, in addition to the potential first-tier fine, an additional civil penalty of up to $100,000 per day may be imposed.
3. Criminal penalties
False Certifications: An issuer’s CEO or CFO could face criminal prosecution if they submit a monthly reserve certification report that contains materially false information:
Knowingly making a false report: a fine of up to $1 million, imprisonment of up to 10 years, or both.
Willfully filing a false report: A fine of up to $5 million, imprisonment of up to 20 years, or both.
False representations of insured status: False claims that stablecoins are backed by the U.S. government or insured by the FDIC/NCUA will be prosecuted under existing law.
Civil penalties: Up to $100,000 per day for unauthorized issuance or violation of sales regulations; up to $100,000 per day for material violations, and an additional $100,000 for knowing violations.
Criminal penalties: False certification of reserve funds carries a maximum fine of $5 million and 20 years in prison.
Regulatory measures: suspension or revocation of issuance license, issuance of cease and desist order, removal of related parties.
Misleading Penalties: False insurance claims are prosecuted under federal law.
Temporary measures: Temporary stop orders are issued in emergency situations.
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Are payment stablecoins considered securities?
The bill explicitly excludes payment stablecoins from the definition of “securities.”
How to ensure the interoperability of stablecoins?
Federal regulators will work with agencies such as the National Technical Information Service (NIST) to evaluate and potentially develop standards to promote compatibility and interoperability of payment stablecoins.
When will the regulator release the implementing rules?
Within 180 days (approximately 6 months) after the bill takes effect, the main federal payment stablecoin regulators must jointly issue detailed rules to implement the requirements for the issuance of payment stablecoins.
When does the bill come into effect?
For any unlicensed payment stablecoin issuer, the issuance of a payment stablecoin would be unlawful on the date of enactment of the bill.
For custodial intermediaries, offering or selling payment stablecoins that are not issued by “licensed payment stablecoin issuers” will not be prohibited until 2 years after the date of enactment of the bill. This gives the market a longer transition period to adapt.
The procedure for approving the issuance of stablecoins by an insured depository institution or a subsidiary of a non-bank entity will take effect on the earlier of the following two dates:
12 months after the date of enactment of the Act;
120 days after the date the lead federal payments stablecoin regulator publishes final regulations implementing Section 5.
Regarding the ban on endogenously collateralized stablecoins, it will take effect immediately on the date of the enactment of the bill and will last for 2 years.
It should be noted that the draft bill has been submitted to the House Financial Services Committee, which will undergo formal review and revision of the bill next Wednesday (April 2). The committee will ultimately decide whether to advance it to a full vote in the House of Representatives and coordinate with the Senate version. It will eventually be sent to the President for signature after being passed by both houses.
