A unanimous Senate Banking Committee voted Thursday to advance the STABLE Act of 2025, a sweeping piece of legislation that could reshape how Americans interact with digital currencies. The bill, formally introduced on March 26, establishes thorough regulations for payment stablecoins while significantly rejecting banking industry demands to ban stablecoin rewards programs.
Traditional banks aren’t happy. They’ve been lobbying hard against what they call the “stablecoin loophole” that lets non-bank entities offer rewards and incentives for stablecoin usage. Tough luck for them. The committee apparently thinks innovation matters more than protecting old-school financial institutions from competition.
The STABLE Act restricts stablecoin issuance to “permitted payment stablecoin issuers” only. Custodial intermediaries will have 18 months to stop offering non-permitted stablecoins. No exceptions.
Under the STABLE Act, only approved issuers can create stablecoins. Everyone else has 18 months to comply or exit the market.
The bill also standardizes oversight between federal and state regulators, forcing states to meet or exceed federal standards.
Reserve requirements are strict: issuers must maintain a 1:1 ratio of reserves to outstanding stablecoins. No funny business allowed. These reserves must consist of U.S. currency, Federal Reserve bank account credits, or specific high-quality liquid assets. Daily compliance checks will be mandatory.
Anti-money laundering isn’t optional either. The bill requires all permitted issuers to implement AML programs tailored to their size and complexity. They’ll need sophisticated distributed ledger analytics to monitor for suspicious activity. U.S. sanctions compliance? Non-negotiable.
Banking industry representatives continue fretting about competitive threats. Treasury estimates suggest up to $6.6 trillion in bank deposits could be at risk if stablecoin rewards continue unchecked. They claim they’re “not ready” to compete with stablecoin incentives. Meanwhile, stablecoin advocates are celebrating the committee’s refusal to prohibit rewards programs.
The legislation now heads to the full Senate with momentum. This legislation aims to protect consumers while still allowing stablecoins to serve as programmable money for automated blockchain transactions. If passed, it will trigger an 18-month adjustment period while the Secretary of Treasury develops tailored regulations.
The payment services landscape is about to get interesting. Banks better adapt or get left behind. That’s just how disruption works.
