Law & Policy

This week's newsletter covers the STABLE Act markup, nomination votes, and new bills addressing retirement accounts, mining, and foreign adversaries' ownership of crypto platforms.

So you’ve been hearing about the STABLE Act of 2025 and how it could change crypto forever. Here’s what you need to know: 🧵
1.   What is the STABLE Act?    
It’s a new U.S. bill to regulate payment stablecoins like USDC, USDT. The goal is to protect consumers and prevent another collapse. But it comes with a lot of rules for issuers.  
2.   Who can issue stablecoins now?    
Only approved banks, credit unions, or specially licensed non-bank entities can issue stable coins with this bill. Stablecoin issuers must meet strict reserve, transparency, and auditing standards.

Law student documenting her findings on crypto law, compliance and regulation. Open to internship

5.   Is the bill bad news for DeFi?    
The bill bans new endogenously collateralized stablecoins for 2 years. This has created a speculation that the bill will hurt innovation because startups can’t afford the cost of becoming a full-on bank and many crypto protocols are decentralized . Therefore, DeFi projects that rely on stable coins would be affected.

So the question is:
Are we prioritizing safety and regulation, or are we choking out innovation and financial freedom?
Either way, this act could reshape how digital money works in the U.S. and maybe beyond. Agree? Disagree? Let me know what you think.

3.   What is the issue surrounding reserves? 
Stablecoins  must  be 100% backed by cash, short-term Treasuries, or bank deposits. There will also be monthly audits and CEO certifications which will be mandatory.This means stablecoin issuers must:
get a federal banking license, be overseen by the federal reserve, hold capital like banks and possibly get FDIC insurance. The bill requires stablecoin issuers to obtain prior written approval from the appropriate federal banking agency and the federal reserve.
4.  Now here is the goodnews. The bill  explicitly says compliant stablecoins  are not securities. This is a huge win for regulatory clarity in this space.