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America’s stablecoin plans are proceeding swiftly as regulators and legislators display a new willingness to ignore all guardrails.
- You’re nobody in this town without a stablecoin bill
- House Digital Asset Subcommittee hearing Tuesday
- Trump’s T-bill comments and Tether
- CFTC round tables on stablecoin tokenization, sports betting
- Trump Media files’ Bitcoin Plus’ ETF trademark application
- World Liberty Financial plots’ strategic reserve’
- World Liberty Financial denies reciprocal token sales
On February 6, House of Representatives’ Financial Services Committee Chairman French Hill (R-AR) and Digital Assets, Financial Technology, and Artificial Intelligence Subcommittee Chair Bryan Steil (R-WI) released a discussion draft of a new bill to “provide for the regulation of payment stablecoins.” The draft has since been rechristened the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act of 2025.
STABLE closely follows both the timing and substance of the GENIUS Act, a new Senate bill aimed at bringing order to the ‘payment stablecoin’ market. Rep. Hill said the goal was to “get this right and deliver a dollar-backed stablecoin for the American people,” while Steil claimed that STABLE would “bolster the U.S. dollar’s position as the world’s reserve currency.”
Monday brought the release of another House stablecoin discussion draft from Rep. Maxine Waters (D-CA), who sparred and collaborated with former Rep. Patrick McHenry (R-NC) over stablecoin legislation in the last Congress. Waters’ statement on her bill appeared to slam the STABLE bill for its lack of Democratic input while celebrating her more ‘bipartisan’ output.
Reiterating her earlier concerns over plans to cut out the Federal Reserve from state-issued stablecoin oversight, Waters’ bill calls for the Fed to have “a central role … throughout” the process. In a dig at Big Tech, firms like Meta (NASDAQ: META), Google (NASDAQ: GOOGL), and X—the latter is planning the launch of a payments platform that may well utilize an in-house stablecoin—would be barred from owning a stable issuer.
Waters’ bill also explicitly targets the largest stablecoin by market cap, Tether (USDT), which is widely considered to be unable/unwilling to meet most requirements of the various proposed stablecoin bills.
Waters’ bill “closes loopholes that would allow stablecoin issuers like Tether to circumvent US law overseas” by making it illegal “to offer or sell a payment stablecoin in the U.S. or to a person living in the U.S. unless it is issued by an issuer under this Act.” Violating this rule would result in fines of up to $1 million and prison terms of up to five years.
Hear ye, hear ye redux
The late arrival of Waters’ bill means it likely won’t come up in conversation at the House Digital Asset Subcommittee’s February 11 hearing (A Golden Age of Digital Assets: Charting a Path Forward). Waters is the ranking member of the House Financial Services Committee but isn’t a member of the subcommittee, although she may just decide to crash the event.
The STABLE bill and several other crypto bills will be discussed by the subcommittee (co-sponsor Steil is the subcommittee chair, after all). Among the witnesses scheduled to attend this legislative love-in are representatives from the Kraken digital asset exchange; the PayPal (NASDAQ: PYPL) payment processor/stablecoin issuer; the Crypto Council for Innovation; and a crypto-focused lawyer.
The list’s closest thing to a crypto critic appears to be Timothy Massad, former chair of the Commodity Futures Trading Commission (CFTC) and a director of the Digital Assets Policy Project at Harvard University’s Kennedy School of Government.
Echoing Waters’ concerns, Massad’s prepared remarks take some shots at the STABLE bill for imposing “insufficient standards and supervision” for “state-chartered nonbank issuers.”
Massad says STABLE creates “many gaps, weaknesses and risks” by allowing state authorities “to set their own standards, thus creating the possibility of much weaker standards for these state-chartered issuers.” Massad notes that the Senate’s GENIUS Act calls for a maximum $10 billion market cap for state-chartered issuers but calls this “far too high unless there are stronger standards for chartering and ongoing federal oversight.”
We’ll address more of this in CG’s coverage of Tuesday’s House hearing, but we’ll just drop this Massad quote as a stopover: “If stablecoins can indeed become globally important as a means of payment and as a way to promote the dollar, surely the foundation should not be a potentially confusing array of fifty state laws of varying standards and no federal oversight.”
Save us, Howard!
The legislative focus on so-called ‘payment’ stablecoins has given a real boost to USDC, the stable issued by the U.S.-based Circle via a partnership with the Coinbase (NASDAQ: COIN) exchange. In just the past month, USDC’s market cap has grown by $10.5 billion to $56.4 billion—a new all-time high—while Tether’s USDT has grown less than $5 billion to $141.9 billion over the same span.
Among the new stable bills’ more consistent elements is the requirement for issuers to submit the reserve assets backing their issued tokens to regular ‘examinations’ by independent accountants. Tether has steadfastly refused to submit to this type of poking and prodding, which could threaten its continued presence on U.S.-based exchanges.
The bills also restrict the type of assets that issuers can hold in their reserves—primarily cash, Treasury bills and other readily convertible dollar-adjacent assets. Tether’s billions held in physical gold bricks, BTC tokens and controversial ‘loans’ to third parties would be off the table.
Howard Lutnick, President Donald Trump’s nominee for Commerce secretary and the alleged custodian of Tether’s T-bills via his financial services firm Cantor Fitzgerald (NASDAQ: ZCFITX), recently denied reports that he’d made a deal to protect Tether from any legislation considered harmful to its financial interests.
Last July, Lutnick reassured a Nashville BTC conference crowd regarding Tether’s reserves, saying, “I can tell you with absolute certainty—absolute certainty—that Tether USDT has every penny” for a 1:1 ratio with issued USDT.
Last week, in on-the-record written responses to questions by senators tasked with approving his Commerce nomination, Lutnick struck a far less authoritative tone, saying only that Cantor “is not conducting continuous diligence on Tether’s financial statements but I believe my statements were accurate when made.”
Fast forward to February 9, when Trump announced that Elon Musk’s Department of Government Efficiency (DOGE) had found unspecified ‘irregularities’ at the Treasury Department, apparently involving “treasuries” aka T-bills, that could mean “maybe we have less debt than we thought.”
Trump’s comments were vague, but this isn’t the first time he’s hinted that America might not fully honor its national debt obligations under his watch. During the 2016 presidential campaign, Trump appeared to suggest that he’d ‘make a deal’ with America’s creditors, comments that caused no shortage of stock market turmoil.
On Monday, administration officials tried to reassure the markets by claiming that Trump was talking about Treasury-originating payments, not T-bills. However, Trump has contradicted those who tried to let him off the hook before, so who knows?
But with Tether holding $113 billion in ‘direct and indirect’ T-bill exposure, the fact that nearly all of Congress appears to be firmly in Tether rival Circle’s camp, and the oft-repeated reports of USDT’s pivotal role in the criminal economy, how hard would it be for Trump to say, just let the Treasury take it all back, and if Tether wants to fight it, let its top execs come to America, where those long-rumored unsealed indictments are waiting in a drawer for just the right moment?
CFTC wants to become a bookie?
Over at the CFTC, acting chair Caroline Pham is wasting no time welcoming crypto in from the cold. Last month, Pham announced plans for “a series of public roundtables” on subjects near and dear to crypto’s heart.
On February 7, Pham announced that the CFTC will hold a “a CEO Forum of industry-leading firms to discuss the launch of the CFTC’s digital asset markets pilot program for tokenized non-cash collateral such as stablecoins.” Last November, a Pham-sponsored advisory committee recommended expanding the use of “non-cash collateral through use of distributed ledger technology.”
No date for this stablecoin summit has been announced, but the participants will include the chief execs of Circle, Coinbase, the Crypto.com exchange, payment processor Moonpay and XRP-issuer Ripple Labs. (Tether’s invite must have got lost in the mail.)
On February 5, the CFTC announced a different roundtable to discuss “regulation and oversight of prediction markets, including sports-related event contracts.” Ahead of this weekend’s Super Bowl, the U.S.-licensed Kalshi prediction market began offering sports-related ‘markets’, as did Crypto.com and online brokerage Robinhood (NASDAQ: HOOD), which relied on Kalshi’s markets.
While Kalshi won federal court permission last year to offer markets on the 2024 U.S. election, sports betting is heavily regulated in the U.S., and none of the aforementioned sites hold betting permits. Bloomberg reported that the CFTC had sent Crypto.com and Kalshi queries about what they thought they were doing.
In another life, the CFTC waged war against the crypto-friendly/internationally licensed Polymarket, but acting chair Pham noted that she’d dissented from this view. Pham added that the CFTC’s existing “interpretations regarding event contracts are a sinkhole of legal uncertainty and an inappropriate constraint” on the new sheriffs. Pham insisted that the CFTC “must break with its past hostility to innovation and take a forward-looking approach to the possibilities of the future.”
This isn’t sitting well with some actual sports betting operators and their industry associations, who say the CFTC appears to be intent on letting prediction markets “circumvent state regulatory frameworks.”
On-chain data indicates that Polymarket’ predictors’ placed $1.1 billion worth of ‘predictions’ on the outcome of Sunday’s big game, only slightly below the total handle expected at state-licensed sportsbooks, so don’t expect the traditional books to go quietly (even if Kalshi now has Donald Trump Jr. on their payroll).
Just like the new management at the Securities and Exchange Commission (SEC), the CFTC seems prepared to effectively let crypto operators do what they like “to facilitate innovation,” with ominous implications for the general public should things go squirrelly.
Bloomberg reported that Pham isn’t likely to remain acting chair for long, as Trump is expected to appoint someone else as the CFTC’s permanent leader. Should Pham not fancy the subordinate role of the commissioner after holding the reins of power, she will undoubtedly find a soft landing at some crypto firm. (Just not this one.)
Trump Media seeks ‘Bitcoin Plus’ ETF trademark
Speaking of the Trump family, whenever one thinks they’ve pushed their crypto cash-making activities as far as propriety will permit, they somehow find another gear. Good thing Trump just fired the Government Ethics Office director, huh?
February 6 brought the latest development from Trump Media and Technology Group (TMTG), the Trump-owned umbrella group that operates the Truth Social platform. TMTG recently announced plans to spend a quarter-billion dollars buying tokens and ‘customized’ exchange-traded funds (ETFs) and separately managed accounts (SMAs), all under the ‘Truth. Fi’ banner.
TMTG has now filed applications for six trademarks—three names, each covering both an ETF and an SMA—Truth.Fi Made in America, Truth.Fi U.S. Energy Independence, and Truth.Fi Bitcoin Plus.
TMTG CEO/Former Congressman Devin Nunes said the goal was to offer real Americans the opportunity to invest in “American energy, manufacturing, and other firms that provide a competitive alternative to the woke funds and debanking problems.” (Better broke than woke?)
Nunes added that TMTG was “exploring a range of ways to differentiate our products, including strategies related to bitcoin.” Nunes didn’t specify what other types of tokens might be included in a ‘Bitcoin Plus’ scheme, just as the original Truth.Fi announcement spoke only of BTC and “similar cryptocurrencies or crypto-related securities.”
WLF plans strategic reserve
TMTG’s ambiguity reflects the indistinct messages coming from the White House regarding plans for a ‘national digital asset stockpile’ rather than the ‘strategic bitcoin reserve’ for which the BTC maximalists are gagging. And yet, the Trump family’s decentralized finance project, World Liberty Financial (WLF), is now embracing the ‘reserve’ language.
Last week, Bloomberg quoted WLF co-founder Chase Herro—who once filmed a crypto promo video in which he claimed that “you can literally sell sh*t in a can, wrapped in piss, covered in human skin, for a billion dollars if the story’s right, because people will buy it”—saying that WLF would establish a “strategic reserve” with the tokens the platform has and is acquiring.
Herro told DLNews that this reserve would be launched “in the very short future.” The reserve would be left “on-chain” to “show commitment back to the industry that’s been so good to us.”
WLF has been using the proceeds from the sale of its ‘governance’ token (WLFI) to acquire a wide variety of digital assets, but the platform has been making some odd moves of late. Last week, WLF transferred over $300 million worth of ETH, wBTC and some other tokens to Coinbase, leaving less than $40 million in its wallets. WLF later claimed that “we are not selling tokens—we are simply reallocating assets for ordinary purposes.”
And yet WLF ‘ambassador’ Eric Trump tweeted, “it’s a great time to add $ETH” a few hours before that ~$200 million ETH transfer to Coinbase. Trump’s tweet originally included a cryptic “You can thank me later” coda that he removed 30 minutes after the original post. Two days later, Eric was tweeting similarly optimistic feelings about BTC
Did we mention that Trump fired the ethics chief?
I like to MOVE it, MOVE it
Interestingly, WLF chose not to transfer any of its TRX, the Tron network’s native token that is inextricably linked to Tron founder Justin Sun. Sun rode to WLF’s rescue in November by buying $30 million worth of WLFI at a time when WLFI was as dead as a doornail. Sun later bought $40 million more WLFI, leading to his appointment as a WLF adviser.
WLF was recently forced to deny reports that it engaged in reciprocal token buys with projects that bought significant quantities of WLFI. Blockworks quoted anonymous sources at multiple blockchain projects saying WLF reps had approached them with the following deal: buy $10 million worth of WLFI—with a 10% fee—and WLF would buy the same amount of that blockchain’s native token.
A second source at a different blockchain project claimed they’d been offered the same deal, but were told that a $15 million buy would secure ‘priority treatment’ from WLF. Blockworks claimed to have seen a message from a WLF rep pitching to one of these unspecified blockchain projects, with caveats that deals would be struck on a “first come first serve” basis.
In late January, WLF acquired $2 million worth of MOVE, the token underpinning an Ethereum’ layer 2′ network that only launched its mainnet beta in December. However, the company behind that network, Movement Labs, was rumored to have discussed a government efficiency role with Musk’s DOGE. Those rumors came shortly after WLF acquired the MOVE tokens, leading to a brief surge in MOVE’s fiat value, something other traders also appeared to anticipate.
Movement Labs founder Rushi Manche pushed back on the DOGE rumors on X, saying, “Nothing from the movement labs offices or growth team have crossed DOGE’s desks.” Manche’s X post also thanked WLF “for their continued support.”
A Movement Labs spokesperson later told Blockworks that Movement “has not purchased any WLFI tokens or engaged with WLF.” Asked about allegations of insider trading involving MOVE, Manche told The Block that he didn’t think “anything was coordinated.”
At the rate things are going, denials like this will seem increasingly quaint over the next few years, like saying ‘excuse me’ after belching in public. Forget it, Jake. It’s Cryptotown.
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