How US Stablecoin Regulation Could Change the Game for Global Payments

Businesses hate slow and expensive international payments. But traditionally, firms haven’t had much choice but to accept the status quo of correspondent banks and their corresponding fees.

Stablecoins, digital assets tied to real-world money like the U.S. dollar, potentially promise to change that — as evidenced by Stripe’s $1 billion acquisition of stablecoin infrastructure platform Bridge, which closed Tuesday (Feb. 4).

“Stablecoins aren’t the future — they’re already transforming how people move money today,” said Zach Abrams, co-founder of Bridge, in the statement.

“We believe stablecoins will play a critical role in turbocharging cross-border commerce,” Stripe added.

Still, for stablecoins to reach their potential, they will need a proper regulatory framework within which to operate, and it looks like stablecoins could be getting that framework in the not-too-distant future.

On Thursday (Feb. 6), House Financial Services Committee Chairman French Hill, R-Ark., and Digital Assets, Financial Technology and Artificial Intelligence Subcommittee Chairman Bryan Steil, R-Wis., introduced a discussion draft for a bill that would establish a framework for issuing and operating dollar-denominated payment stablecoins. The proposal builds on previous legislative efforts while aiming to create clear regulatory guidelines for stablecoin issuers at both the federal and state levels.

“Building upon our work on digital assets in the last Congress, our discussion draft will provide clarity for payment stablecoins and ensure a federal and state path for stablecoin issuers,” Hill said.

It could ultimately lead to faster, cheaper global transactions that cut out traditional banking headaches.

Read more: Crypto’s Green Light? SEC Pledges ‘Common Sense’ Rules

Legislative Backing and Industry Implications

Stablecoin regulation has emerged as a key issue in the broader digital assets space. Lawmakers aim to balance fostering innovation in financial technology with ensuring consumer protection and maintaining the U.S. dollar’s dominance in global markets.

“The largest financial institutions are eager to explore tokenized assets,” Nikola Plecas, head of commercialization, Visa Crypto, told PYMNTS in October, but he added that they require regulatory certainty to do so at scale.

The proposed bill comes as stablecoins are being “increasingly heralded as the bridge between traditional finance and the cryptocurrency world, have started to change that dynamic,” as PYMNTS wrote last month. However, regulatory uncertainty has limited their broader integration into mainstream finance. The bill seeks to address these concerns by setting explicit guidelines for issuers, including licensing requirements, operational risk management and reserve backing mandates.

“From enhancing transaction efficiency to driving demand for U.S. Treasuries, the potential benefits of strong stablecoin innovation are immense. We need legislation that establishes a safe and pro-growth regulatory framework that will unleash innovation and advance the President’s mission to make America the world capital of crypto,” Sen. Bill Hagerty, R-Tenn., said in a statement.

The discussion draft builds upon prior legislative efforts, notably the Clarity for Payment Stablecoins Act, which received bipartisan support in the last Congress. A key difference between the new proposal, dubbed the STABLE Act, and its predecessor lies in the regulatory authority for stablecoin issuers.

Whereas the Clarity for Payment Stablecoins Act of 2023 proposed oversight by the Federal Reserve, the STABLE Act designates the Office of the Comptroller of the Currency (OCC) as the primary supervisor for federally qualified nonbank stablecoin issuers. This shift reflects an evolving regulatory approach that seeks to balance state and federal oversight while promoting financial stability and innovation.

Read more: Stablecoin Sandwiches? Here’s What CFOs Need to Know About Crypto Jargon

Next Steps for Cross-Border Payments Innovation

With the discussion draft now public, lawmakers anticipate robust engagement from industry stakeholders, consumer advocacy groups and financial institutions. The Subcommittee on Digital Assets, Financial Technology and Artificial Intelligence is set to review the proposal under the theme “A Golden Age of Digital Assets: Charting a Path Forward.” The input gathered from these discussions will likely shape the final version of the legislation.

The push for stablecoin regulation underscores a broader recognition of digital assets’ role in modern financial ecosystems. As the regulatory landscape takes shape, the collaboration between the House and Senate will be instrumental in determining how stablecoins fit into the evolving framework of U.S. financial regulation.

After all, Stripe and Bridge aren’t the only recent news around stablecoin infrastructure integration. On Wednesday (Feb. 5), news broke that cryptocurrency and stablecoin infrastructure platform Zero Hash is integrating Ripple’s RLUSD stablecoin.