U.S. Lawmakers Aim to Regulate the Rapidly Growing Stablecoin Market. The Proposed STABLE and GENIUS Acts Set Strict Compliance Rules, With Major Implications for Companies Like Tether.

The STABLE Act outlines provisions to authorize the Office of the Comptroller of the Currency (OCC) to oversee federal qualified nonbank stablecoin issuers.

The United States lawmakers are discussing a bill to impose a two-year ban on stablecoins that are solely backed by self-issued digital assets. The U.S. Treasury will assess the risks posed by stablecoins to establish a regulatory framework for ensuring market stability and security.

This news comes as the U.S. House of Representatives prepares to introduce legislation aimed at regulating stablecoins, with a focus on imposing stricter compliance rules. The bill, titled the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act, seeks to streamline regulatory frameworks for stablecoin issuers.

House lawmakers introduced a new proposal to regulate stablecoins which focuses on clearer oversight and compliance requirements. The bill, titled the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act, seeks to create a consistent framework for U.S. stablecoin issuers.

The STABLE Act outlines provisions to authorize the Office of the Comptroller of the Currency (OCC) to oversee federal qualified nonbank stablecoin issuers. Lawmakers aim to streamline regulatory frameworks for stablecoin issuers to reduce uncertainty in the industry.

Moreover, the Senate is also introducing a bill called the GENIUS Act, which has some similarities to the STABLE Act. The GENIUS Act aims to establish clear regulations for stablecoin issuers that exceed $10 billion in market capitalization. State-level regulation would apply for issuers below this threshold, offering flexibility to smaller entities.

These bills also include stricter requirements for stablecoin issuers, especially for large-scale players like Tether. Tether, the world’s largest stablecoin by market cap, could face major hurdles under the new bills. Lawmakers have stressed that companies like Tether must comply with regulations or cease issuance in the U.S.

Although Tether provides quarterly reports on its reserves, it has faced scrutiny for not maintaining full audits. Lawmakers argue that companies must meet high standards such as a full audit by a U.S-based firm, to ensure compliance. Critics argue that Tether’s lack of an audit could become a barrier to its operations in the U.S. if the bill becomes law.

The STABLE and GENIUS Acts also address possible delisting of stablecoins on major exchanges like Coinbase and Kraken. Even though none of the bills mandate delisting, exchanges may decide to reduce exposure to non-compliant coins. Industry observers predict that non-compliant tokens may face stricter scrutiny over their use in the U.S. market.

However, exchanges will likely assess the risk and decide whether to continue supporting Tether. They may choose to restrict access to USDT for U.S. customers to reduce exposure. These decisions will depend on future regulatory developments and the stability of the broader stablecoin market.

The introduction of these bills marks a major step in the U.S. government’s effort to regulate the industry. Lawmakers across both chambers of Congress are expected to collaborate to finalize the legislation. Although the bills may take months to pass and become law, there is no grace period for issuers to meet new compliance standards.