US Stablecoin regulatory framework moves forward despite backlash over Trump conflicts of interest concerns

US lawmakers are moving closer to defining a national regulatory framework for stablecoins, with a major stablecoin bill advancing in Congress.

On April 2, the House Financial Services Committee approved the STABLE Act of 2025 (H.R. 2392), a key piece of legislation that outlines regulatory standards for dollar-pegged stablecoins. The bill passed with 32 members in favor and 17 against.

If signed into law, the bill would establish clear rules for issuing and managing dollar-backed stablecoins. It would include reserve requirements and anti-money laundering measures to protect consumers while promoting responsible innovation in the financial sector.

Proponents of the STABLE Act believe it provides long-overdue clarity for stablecoin issuers. They argue that a standardized framework would reduce regulatory uncertainty and strengthen the US’s position in the evolving digital asset space.

Democrats raise criticism

Despite the bill’s advancement, it has faced sharp criticism from several Democratic lawmakers.

Leading up to the vote, Democrats proposed amendments to block government officials, including the president, from holding financial interests in stablecoin-related ventures. The proposals were not adopted.

Representative Maxine Waters, the committee’s ranking Democrat, denounced the bill, calling it a “dangerous precedent.” She claimed it could benefit President Donald Trump by paving the way for a family-affiliated stablecoin to be used in federal transactions.

Waters warned:

“This Committee is setting an unacceptable and dangerous precedent validating the President and his insiders’ efforts to write rules of the road that will enrich themselves at the expense of everyone else.”

Representative Nydia Velazquez echoed these concerns while pointing to ongoing conflicts of interest tied to the Trump administration’s connections to the crypto industry.

She stated:

“The Trump Administration is plagued by conflicts of interest and profiteering, particularly among those connected to crypto. President Trump’s and co-president Elon Musk ‘DOGE’ is itself a reference to a memecoin that Musk has long promoted on social media.”

Also, Representative Sylvia Garcia said:

“Republicans are fast-tracking a stablecoin bill that allows Donald Trump, his family, and Elon Musk to continue to corruptly cash in on shady crypto schemes—all while Trump sits in the Oval Office. No rules. No accountability. Just profit off the backs of everyday investors and taxpayers.”

Despite the criticism, Republican Committee Chair French Hill defended the legislation. He emphasized the importance of encouraging innovation and maintaining US leadership in global finance.

Hill stated that digital asset policies should prioritize competition and private sector development.

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