The CFA Institute Systemic Risk Council (the SRC) today released a letter to congressional leaders urging strong, effective regulatory oversight of the stablecoin market and commending bipartisan efforts to build consensus around a credible regulatory process for stablecoin products. Currently , there are two proposals in the Congress: the Stablecoin Transparency and Accountability for a Better Ledger Economy Act of 2025 (“STABLE Act”) in the House and the Guiding and Establishing National Innovation for U.S. Stablecoins of 2025 (“GENIUS Act”) in the Senate. Both proposals require that stablecoins must be issued by licensed institutions subject to regulatory supervision at either the state or federal level. Of particular importance, both bills contain strict reserve requirements, requiring outstanding coins to be backed, dollar for dollar, with highly liquid, low risk assets such as US Treasuries. In addition, both proposals require stablecoin issuers to comply with laws and regulations combating money laundering and terrorist financing.
Despite these strengths, the SRC notes a variety of gaps in the bills which could nullify their effectiveness. The SRC warned that final legislation must provide not just the appearance of meaningful oversight, but the reality as well. The SRC comment letter concludes with its views on a credible framework for stablecoin oversight.