Representative Maxine Waters, the top Democrat on the House Financial Services Committee, has introduced a comprehensive bill aimed at regulating payment stablecoins, challenging a separate Republican proposal released last week.
Waters' bill, unveiled Monday, requires stablecoin issuers to be either registered payment providers, licensed nonbank entities, or subsidiaries of insured depository institutions. The legislation mandates strict one-to-one reserve requirements backed by U.S. currency, insured deposits, or Treasury securities.
"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," Waters stated in announcing the legislation.
The bill emerged from three years of bipartisan work and received input from the Treasury Department and Federal Reserve. It would impose penalties up to $1 million and five years imprisonment for unregistered issuers.
In contrast, House Financial Services Committee Chairman French Hill's Republican-backed proposal would grant oversight authority to the Office of the Comptroller of the Currency rather than the Federal Reserve.
Waters' bill also includes a two-year ban on endogenously collateralized stablecoins and requires monthly reserve disclosures. The proposed rules would take effect 120 days after regulators issue final regulations, which must occur within 18 months of enactment.
The competing proposals highlight ongoing efforts in Congress to establish clear regulatory frameworks for digital assets, with both parties pursuing different approaches to oversight and consumer protection.