The Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act of 2025 (H.R. 2392) was introduced by Representative Bryan Steil (R-WI) and co-sponsored by Representative French Hill (R-AR) as part of a broader push to establish comprehensive oversight for stablecoin markets. It arrives at a pivotal moment in Washington, as Congress shifts from reactive enforcement to proactive, durable frameworks for digital asset oversight. The bill reflects a bipartisan effort to formalize stablecoin issuance through legislation rather than agency interpretation, laying down structural rules for a market that has outgrown regulatory ambiguity. By placing oversight under the OCC (Office of the Comptroller of the Currency) and mandating fully backed, liquid reserves, the Act reframes stablecoins as bank-like instruments—with the obligations that come with systemic trust. It isn’t about curbing innovation. It’s about setting the perimeter of the financial system.
With the competing GENIUS Act having failed to advance in the Senate, STABLE now stands as the most viable federal proposal for regulating payment stablecoins. But it’s important to remember: this is still draft legislation.While the STABLE Act has cleared committee, its provisions remain subject to public comment, committee markups, and political negotiation before it can move to a full House vote and potential reconciliation with the Senate. That said, this blog offers a grounded look at what a compliant future could look like if this framework moves forward—breaking down its key requirements, risks, and operational implications for issuers, intermediaries, and compliance teams.
The STABLE Act defines a payment stablecoin as a digital asset that is or is intended to be used for payments or settlement, and either (i) is redeemable at a fixed monetary value or (ii) is marketed as maintaining a stable value relative to that amount. This broad framing ensures the law captures both fully redeemable stablecoins and those that function or appear stable, even without a formal redemption mechanism. The aim is to regulate how stablecoins are used and perceived in the financial system, not just how they're structured.
Crucially, the Act clarifies that payment stablecoins are not treated as securities, removing ambiguity around overlapping jurisdiction and reinforcing that this framework is tailored for money-like instruments, not investment products.
The STABLE Act introduces a federal-first oversight model for stablecoins, placing the OCC at the center of regulatory authority. The OCC is responsible for licensing, supervision, and enforcement for federally chartered nonbank issuers, including oversight of reserve practices, AML compliance, and redemption procedures.
At the same time, the Act allows for a dual regulatory track: state-chartered issuers may operate under state supervision, but only if their regulatory frameworks are certified by the Treasury Department as meeting or exceeding federal standards. This coordination is designed to prevent regulatory arbitrage while preserving some role for states with strong supervisory systems.
To support this structure, the Act envisions the use of memoranda of understanding (MOUs) between federal and state regulators to facilitate joint oversight, information sharing, and enforcement cooperation. Therefore, while the STABLE Act allows state regulators to remain active supervisors, it does so under a federalized framework—not a fully dual system. States can issue rules, conduct oversight, and share information, but only if their regulatory standards meet or exceed those set at the federal level—ensuring consistency without ceding control.
Only entities designated as Permitted Payment Stablecoin Issuers (PPSIs) are allowed to issue payment stablecoins under the STABLE Act*. These include:
This structure narrows who can issue stablecoins and raises the compliance bar, aligning issuance with bank-like standards. Oversight extends beyond the issuer to its parent company and institution-affiliated parties—including executives, affiliates, and key service providers—bringing the full operational chain under regulatory scrutiny. In doing so, the STABLE Act mirrors the supervisory reach of federal banking law, embedding stablecoin oversight into a tested regulatory framework.
Nonbank entities must apply directly to the OCC, submitting:
The OCC is required to review applications within 120 days, and must issue written explanations for rejections. Approved issuers are subject to ongoing quarterly reporting, periodic examinations, and activity restrictions unless explicitly cleared by regulators. The process mirrors traditional bank licensing—but is purpose-built for stablecoins, embedding them in a compliance-first framework without requiring a full banking charter.
The STABLE Act mandates that all payment stablecoins be backed 1:1 by safe, liquid assets—primarily to ensure users can redeem at par even during market stress. This reserve model is intentionally conservative, positioning stablecoins closer to cash than to yield-generating instruments.
Permitted reserves include:
Not allowed:
Reserves must be held in segregated accounts—separate from the issuer’s operating funds—and cannot be reused (rehypothecated) without regulatory approval.
Issuers are also required to:
Critically, the Act prohibits stablecoin issuers from paying interest—preserving their role as transactional instruments, not investment products. While these protections reinforce user trust, they also raise the compliance bar—especially for crypto-native firms operating without legacy banking infrastructure.
The STABLE Act brings stablecoin issuers under the full scope of the Bank Secrecy Act (BSA), meaning they must operate with the same AML rigor expected of traditional financial institutions. This includes:
The STABLE Act doesn’t prescribe how monitoring must be done—but it does expect issuers to demonstrate that controls are proportionate, responsive, and auditable. That means investing in infrastructure that evolves as risks evolve.
Under the STABLE Act, custodial intermediaries—such as wallet providers and custodians holding payment stablecoins—are subject to stringent requirements to safeguard customer assets. Key provisions include:
The STABLE Act distinguishes between custodial and non-custodial wallet providers:
This distinction ensures that user autonomy is preserved for those opting for self-custody, while imposing necessary oversight on entities that manage assets on behalf of others.
The STABLE Act permits foreign stablecoin issuers to offer tokens in the U.S.—but only if the Treasury Secretary certifies that their home jurisdiction has a comparable regulatory framework. This determination is discretionary and lacks predefined criteria, giving Treasury flexibility but also introducing potential uncertainty for non-U.S. firms.
Foreign issuers have 18 months from enactment to meet compliance standards or exit the U.S. market. During this period, they must either:
The STABLE Act allows foreign stablecoin issuers to operate in the U.S., but only if their home country’s regulatory regime is deemed “comparable” by the Treasury Secretary.The goal is clear: align offshore regimes with U.S. standards without imposing a blanket ban.
But the provision stops at intermediaries. It restricts listings and custodial flows, not usage. Foreign stablecoins can still circulate freely through DeFi or self-custody, limiting the Act’s practical reach. The lack of defined comparability criteria, clear penalties, or robust enforcement tools further weakens its bite.
Critics warn this framework may backfire. It risks incentivizing issuers to incorporate offshore while burdening U.S. firms with stricter compliance. It leaves systemic risks tied to dollar-denominated liabilities created abroad largely unaddressed.
In effect, the provision gestures toward global standard-setting, but without clarity or enforcement, it may do little more than reroute risk.
The STABLE Act passed the House Financial Services Committee on April 2, 2025, with a 32–17 vote. That’s significant—but not the final word.
If enacted, the STABLE Act will initiate a multi-stage regulatory rollout. The OCC and Treasury will have 12 months to define critical implementation rules—governing reserve composition, issuer approval, foreign comparability, and disclosure standards. Issuers will then enter a 24-month transition window to meet these requirements or withdraw from the U.S. market. Foreign issuers face an 18-month deadline tied to Treasury's comparability assessment.
On paper, these timelines are generous. In practice, their success will depend on several real-world factors:
These challenges make the transition period more than just a countdown. It’s a stress test for the regulatory system—and a test of whether stablecoin infrastructure can evolve without fragmenting the market in the process.
*The primary federal regulator for an IDI (insured depository institution) remains its existing banking regulator—either the Federal Reserve, OCC, FDIC, or NCUA. For nonbank stablecoin issuers, the OCC serves as the primary regulator under the STABLE Act.
