In an attempt to persuade the United States Congress to enact pro-crypto legislation, the cryptocurrency industry made an unprecedented amount of money in campaign donations during the 2024 Presidential Polls.
With lawmakers who support cryptocurrency lining the hallways of Congress, such efforts appear to have been mainly successful. The first area of crypto that they have chosen to focus on is the regulation of stablecoins.
Cryptocurrencies designed to maintain the value of the US dollar are known as stablecoins. Supporters argue that stablecoins facilitate safer, more affordable, and borderless transactions for individuals worldwide, while also helping to preserve the global significance of the dollar as the world’s largest economy. The use of stablecoins is rapidly increasing. Just a year ago, their total market value was only $152 billion, but it has now surpassed $235 billion.
President Donald Trump stated in March 2025 that he intended to enact legislation about stablecoins by August. As a result, stablecoin measures have advanced out of committee in both the House and the Senate in the last month.
What are Stablecoins?
In a way, stablecoins are similar to bank deposits. The issuing corporation mints a stablecoin on a blockchain after receiving a dollar from a customer who wants one. Thereafter, the user can send the stablecoin to anyone who accepts it as payment anywhere in the world.
Stablecoins are popular among cryptocurrency traders because their price fluctuates less than that of assets like Bitcoin or Ethereum, which makes trading more predictable. Additionally, stablecoins are valued by many non-traders worldwide because they retain their value better than currencies in nations with high rates of inflation, such as Argentina and Turkey.
Supporters of stablecoins in the US come from various political backgrounds. Political figures on the right, such as House Majority Whip Tom Emmer, contend that stablecoins support the dollar’s continued usage as the global reserve currency. There are still a ton of Eurodollars in circulation worldwide, which are unsecured, unofficial dollars issued by foreign banks rather than the Federal Reserve.
This large need might be satisfied by stablecoins, which also provide a more secure and convenient way to deal. Additionally, proponents contend that a rise in stablecoin demand could lessen the burden of the United States’ soaring debt because stablecoin issuers frequently secure their stablecoins by purchasing US Treasuries.
According to some Democrats, stablecoins offer avenues for financial inclusion and the elimination of discriminatory banking structures. In September 2024, Ritchie Torres, a representative from New York, expressed to TIME his belief that stablecoins could help individuals in his district, which has a significant immigrant population, send money quickly to the Caribbean and Latin America. This method would allow them to avoid check-cashing fees and protect them from predatory loan sharks.
For the lowest-income communities, “the ability to move a tokenised dollar at the speed of the blockchain has the potential to create a better, cheaper, and faster payment system,” he stated.
Six Democrats, including Torres, supported the STABLE Act when it emerged from the House Financial Services Committee on April 2.
Discussing Trump’s involvement
Two companies presently control the majority of the stablecoin market: USDT (issued by Tether) and USDC (issued by Circle). Although Tether is very well-liked outside of the United States, regulators have accused it of making false claims about its reserves. Howard Lutnick, Trump’s new Commerce Secretary, had previously had financial ties to the company.
Many different kinds of businesses would be able to issue their stablecoins thanks to the laws that Congress is currently considering. Notably, World Liberty Financial, the cryptocurrency business owned by the Trump family, has unveiled its stablecoin. This is only the most recent of Donald Trump’s cryptocurrency endeavours, which also include a meme coin and a federal Bitcoin reserve.
The launch of World Liberty’s stablecoin was immediately criticised because of worries that Trump would once more have a direct financial interest in a sector of the economy that he is meant to oversee. After years of working on stablecoin legislation, California Democrat Maxine Waters now declares her adamant opposition to any bill that would give Trump the ability to possess a stablecoin.
Donald Trump’s crypto initiatives made crafting legislation “more complicated,” according to French Hill, a Republican from Arkansas and the chair of the House Financial Services Committee, who made the statement this week.
Laws under consideration
Out of their respective committees, the House and Senate have both passed stablecoin measures, known as the GENIUS Act and the STABLE Act, respectively. The bills outline the governance of stablecoins and mandate the types and quantities of reserves that stablecoin issuers must maintain. To have a single law on President Donald Trump’s desk before the summer, the House and Senate will now have the chance to reconcile the two versions.
Many financial organisations would probably try to establish their stablecoin if legislation were passed. For example, Bank of America stated that it would introduce a stablecoin as soon as politicians approved it. Additionally, PayPal and Stripe have revealed their stablecoin projects.
The desire for a stablecoin measure is strong among lawmakers from both parties in Washington. However, several lawmakers have voiced their worries. One of Congress’s most outspoken crypto sceptics, Elizabeth Warren, has maintained that the legitimacy of stablecoins has systemic dangers, particularly because they may be vulnerable to bank runs.
When the stablecoin UST lost its dollar peg and plunged to zero in 2022, it sparked a huge cryptocurrency crisis. However, the STABLE Act prohibited UST, an algorithmic stablecoin, from receiving federal clearance for two years.
At a hearing for the GENIUS Act in March, Warren stated, “The bill lacks basic safeguards necessary to ensure that stablecoins don’t blow up our entire financial system.”
Stablecoin issuers are permitted to invest in risky assets under this bill, including the same assets that were bailed out in 2008.
Additionally, some critics are concerned that the stablecoin bills as they stand now would further consolidate corporate control by enabling Big Tech firms like Meta and X to create their own currencies.
Arthur Wilmarth, a professor emeritus at George Washington University Law School, said, “If people believe that these days there is a Big Tech surveillance state, just think of what it would be like when they have access to all of your financial information. The bills don’t contain much, if anything, that would protect you.”
Stablecoins have swiftly moved from niche financial instruments to major players at the intersection of technology, finance, and politics. Their promise of cheaper, faster, and more accessible transactions appeals across political lines, offering potential solutions to both global dollar stability and domestic financial inclusion.
However, their rapid rise and political entanglements, especially with figures like President Donald Trump and his family’s ventures, have also injected new risks and controversies into the mix.
The GENIUS Act and the STABLE Act represent serious efforts to impose much-needed regulatory frameworks on the burgeoning stablecoin market, but they are far from flawless. Critics rightfully warn about the potential for financial instability, increased corporate surveillance, and conflicts of interest at the highest levels of government.
As lawmakers attempt to reconcile their versions of the legislation and rush to deliver a unified bill to the President’s desk by summer, the stakes are enormous.
If done correctly, stablecoin regulation could modernise America’s financial infrastructure and secure the dollar’s dominance for the digital age. If done poorly, it could open the floodgates to new financial risks and exacerbate the concentration of economic power in Big Tech and politically connected firms.
Ultimately, the coming months will determine whether stablecoins become a force for innovation and democratisation—or another cautionary tale in the long history of financial hubris. The world will be watching as Congress decides whether to anchor this emerging technology firmly within a stable regulatory framework or let it drift into dangerous waters.