Congresswoman Maxine Waters Proposes Bill to Regulate Stablecoin Issuers for Consumer Protection and Compliance

• On February 10, Representative Maxine Waters unveiled a proposed draft bill aimed at establishing a robust regulatory framework for stablecoin issuers in the United States.

• The legislation emphasizes strict compliance measures, mandating that all stablecoins are backed one-to-one by secure reserves like US currency or Treasury bills.

• Key highlights include provisions for Federal Reserve oversight and strict anti-money laundering compliance, ensuring protection against financial crimes.

This article explores Representative Waters’ proposed bill for stablecoin regulation, emphasizing compliance, consumer protection, and Federal Reserve oversight.

Maxine Waters Pushes For Stablecoin Regulation

The proposed bill outlines a licensing and regulatory framework for payment stablecoin issuers, differentiating between requirements for nonbank and bank issuers. A pivotal aspect of this legislation is the role of the Federal Reserve, which would oversee stablecoin operations to ensure adherence to newly defined regulations.

Importantly, the bill stipulates that all stablecoin issuers must maintain 100% reserves, consisting of widely acknowledged secure assets. This also includes provisions to prohibit unauthorized issuers from operating within the United States, implementing substantial penalties for any violators.

“Be fined not more than $1,000,000 for each such violation; (ii) imprisoned for not more than 5 years; or (iii) be fined as described in clause (i) and imprisoned as described in clause (ii),” states the proposed legislation.

The bill goes further by including comprehensive consumer protection measures, specifically banning non-financial companies from owning stablecoin issuers. This is aimed at maintaining a clear division between banking and commerce, which is central to regulatory integrity.

Moreover, all stablecoin issuers are required to comply with stringent anti-money laundering (AML) and counter-terrorism financing (CTF) laws, ensuring that their operations do not facilitate illicit activities. This includes compliance with U.S. sanctions laws.

Individuals previously convicted of specific financial crimes will also find themselves barred from holding significant positions within these companies, aligning with broader goals of financial reform and consumer protection.

The Federal Reserve would be empowered to enforce these regulations, while existing agencies such as the Treasury Department, Consumer Financial Protection Bureau (CFPB), Securities and Exchange Commission (SEC), and Commodity Futures Trading Commission (CFTC) would maintain supervisory roles across activities involving stablecoins, exchanges, and other intermediaries.

This legislation has received input from bipartisan congressional staff, underlining its collaborative origin and reinforcing its aim as a balanced approach to stablecoin regulation.

“This draft bill fosters innovation, while properly addressing and prioritizing concerns I have long held about safeguarding our nation’s consumers from scams that have plagued the crypto industry,” Congresswoman Waters affirmed.

Waters’ proposal arrives in the wake of similar efforts from Republican Representatives French Hill and Bryan Steil, who introduced their own payment stablecoin bill titled the STABLE Act of 2025 just days prior.

Furthermore, the Senate is also advancing its own regulation initiatives. Senator Bill Hagerty recently presented the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, aiming to establish a national framework for stablecoin regulation.

In addition, CFTC Acting Chair Caroline Pham has announced a CEO Forum dedicated to discussing and formulating new stablecoin policies, highlighting the industry’s growing focus on regulatory clarity and innovation.

Conclusion

As Congress pushes for comprehensive regulations on stablecoins, the introduction of this bill signals a pivotal move towards enhancing financial integrity and consumer protection in the digital asset space. Stakeholders expect further developments as both legislative bodies scrutinize and refine proposals to ensure a balanced approach that encourages innovation while safeguarding the financial system.