Interpretation of the US stablecoin bill STABLE Act Web3 dollar "hegemony"?

Over the past few decades, the global dominance of the US dollar has relied on the evolutionary mechanism of the “Bretton Woods System - Petrodollar - US Treasury Bonds + Swift System.” However, entering the Web3 era, Decentralized Finance technology is gradually shaking the traditional clearing and payment pathways, and stablecoins pegged to the US dollar are quietly becoming a new tool for the “dollar going abroad.”

In this context, the significance of stablecoins has long gone beyond the compliance of a single crypto asset, and it may be the digital carrier for the continuation of the “dollar hegemony” in the Web3 era.

On March 26, 2025, the U.S. Congress officially introduced the Stablecoin Transparency and Accountability for a Better Ledger Economy Act, which systematically established the issuance threshold, regulatory framework and circulation boundaries of U.S. dollar stablecoins for the first time. So far, the bill has passed the House Financial Services Committee on April 2 for consideration, and it needs to be voted on by the House of Representatives and the Senate before it can become law. This is not only a response to the long-term regulatory vacuum in the stablecoin market, but perhaps a key step in trying to build the “institutional infrastructure” of the next generation of US dollar payment networks.

So, what problem does this new bill aim to address? Does the difference from MiCA reflect the United States’ “institutional strategy”? Is it paving the way for Web3 dollar hegemony?

These issues will be shared one by one by Lawyer Mankun in this article.

What kind of US dollar stablecoin does the STABLE Act aim to establish?

According to the document, the stablecoin bill being launched attempts to establish a clear compliance framework specifically applicable to “Payment Stablecoins.” We have distilled its five core points:

1. Clarify the target of supervision and focus on “payment stablecoins”

The first step of the STABLE Act is to clarify the core object of regulation: dollar-pegged stablecoins that are issued to the public and can be directly used for payment and settlement. In other words, it’s the crypto assets that are being used as on-chain “alternatives to the dollar” that are really included in the regulatory framework, not all tokens that claim to be pegged to the dollar.

To avoid the spread of risk, the bill explicitly excludes certain high-risk or structurally unstable token models. For example, algorithmic stablecoins, partially collateralized stablecoins, or “pseudo-stablecoins” with speculative attributes and complex circulation mechanisms are not within the scope of this bill. Only stablecoins that achieve full support for 1:1 dollar assets, possess a transparent reserve structure, and are intended for public daily trading and circulation are considered “payment stablecoins” and are subject to regulatory arrangements under this bill.

From this perspective, the STABLE Act is truly concerned not with the “technical carrier” of stablecoins, but whether it is constructing a “payment network on the dollar chain.” What it aims to regulate is the issuance method and operational basis of the “digital dollar,” rather than all tokens bearing the USD label.

2. Establish a “redemption right” mechanism, pegged at 1:1 to the US dollar.

In addition to regulatory access thresholds and issuer qualification requirements, the STABLE Act emphasizes the arrangement of “redemption rights” for stablecoin holders, meaning the public has the right to redeem their stablecoins for U.S. dollars at a 1:1 ratio, and the issuer must fulfill this obligation at all times. This system arrangement essentially ensures that stablecoins do not become “pseudo-pegged assets” or “internally circulating system tokens.”

At the same time, in order to prevent the risk of liquidity crisis or run, the bill also sets clear requirements for asset reserves and liquidity management. Issuers are required to hold a 1:1 ratio of high-quality, readily realizable US dollar assets (e.g., Treasury bonds, cash, central bank deposits, etc.) and subject to ongoing review by the Federal Reserve. This means that stablecoin issuers cannot “take users’ money to invest in high-risk assets”, nor can they use algorithms or other derivative structures to achieve “anchoring”.

Compared to some early market stablecoin models with “partial reserves” and “vague disclosures,” the STABLE Act enshrines “1:1 redeemable” in federal legislation, representing higher requirements for the underlying credit mechanism of the “digital dollar alternative” in the United States.

This not only responds to the public’s concerns about the “de-peging” and “explosion” of stablecoins, but also intends to create an anchor system of institutional guarantee + legal trust for US dollar stablecoins to support their long-term use in the global clearing network.

3. Strengthen capital and reserve supervision to avoid “trust circulation”

Based on the principle that “stablecoins must be redeemable 1:1”, the STABLE Act further specifies the types of reserve assets, management methods, and audit mechanisms, aiming to control risks from the source and avoid the hidden dangers of “superficial anchoring and substantial idleness.”

Specifically, the bill requires all payment stablecoin issuers:

• Must hold an equivalent amount of “High-Quality Liquid Assets” (High-Quality Liquid Assets), including cash, short-term U.S. Treasury bonds, Federal Reserve account deposits, etc., to ensure user redemption requests;
• Reserve assets must not be used for lending, investing, or other purposes to prevent systemic risks arising from “using reserve money for profit.”
• Regularly accept independent audits and regulatory report obligations, including reserve transparency disclosures, risk exposure reports, portfolio descriptions, etc., to ensure that the public and regulatory agencies can understand the asset base behind the stablecoin;
• Reserve assets must be kept segregated in FDIC-insured banks or other compliant custodial accounts to prevent the project party from integrating them into their own funding pool for mixed use.

This institutional arrangement aims to ensure that the “anchor” is real, auditable, and fully redeemable, rather than just “verbally anchored with on-chain floating profits.” Historical experience shows that the stablecoin market has repeatedly faced credit crises due to inadequate reserves, fund misappropriation, or lack of information disclosure. The STABLE Act is intended to plug these risk gaps at the institutional level and strengthen the “institutional endorsement” of the dollar anchor.

On this basis, the bill also grants the Federal Reserve, the Treasury, and designated regulatory agencies long-term oversight over reserve management, including intervention measures such as freezing non-compliant accounts, suspending issuance rights, and enforcing redemption, which constitutes a relatively complete stablecoin credit loop.

4. Establish a “registration system” to bring all issuers under regulation.

The STABLE Act does not adopt a “license classification management” approach in its regulatory path design, but instead establishes a unified registration system for market access. The core point is that all institutions intending to issue payment stablecoins, regardless of whether they are banks, must register with the Federal Reserve and be subjected to federal-level regulatory review.

The bill establishes two types of legal issuer pathways: first, insured depository institutions regulated by federal or state authorities can directly apply to issue payment stablecoins; second, nondepository trust institutions can also register as stablecoin issuers as long as they meet the prudential requirements set by the Federal Reserve.

The bill also specifically emphasizes that the Federal Reserve not only has the authority to approve registrations but can also refuse or revoke registrations when it deems there is systemic risk. Additionally, the Federal Reserve is granted continuous oversight rights over the reserve structures, solvency, capital ratios, risk management policies, and other aspects of all issuers.

This means that in the future, all US dollar-paid stablecoin issuances must be included in the federal regulatory network, and it is no longer allowed to bypass censorship through methods such as “state-only registration” or “technology neutrality”.

Compared to the previously more lenient multi-path discussion proposals (such as the GENIUS Act allowing for state-level regulation to start), the STABLE Act clearly demonstrates stronger regulatory uniformity and federal leadership, attempting to establish the legal boundaries for dollar stablecoins with a “national registration regulatory system.”

5. Establish a federal-level licensing mechanism to clarify multiple regulatory paths.

The STABLE Act also establishes a federal-level stablecoin issuance licensing system and provides diverse compliance pathways for different types of issuers. This system arrangement not only continues the “federal-state dual-track” structure of the U.S. financial regulatory system but also responds to the market’s expectations for flexibility in compliance thresholds.

The bill sets three optional paths for the issuance of “payment stablecoins”:

• First, become a federally recognized National Payment Stablecoin Issuer, directly subject to examination and licensing by U.S. federal banking regulators (such as OCC, FDIC, etc.) ;
• Second, issuing stablecoins as a licensed savings bank or commercial bank can enjoy higher trust endorsement, but must comply with traditional banking capital and risk control requirements;
• Third, operate on the basis of state-level licensing, but must accept federal-level “registration + supervision” and meet unified standards for reserves, transparency, anti-money laundering, etc.

The intention behind this system design is to encourage stablecoin issuers to register “on-chain” legally, bringing them under financial regulation, but not to enforce a one-size-fits-all approach to bankification, thereby achieving controllable risks while protecting innovation.

In addition, the STABLE Act also gives the Federal Reserve (FED) and the Treasury broader coordination powers to impose additional requirements on stablecoin issuance, custody, and trading based on systemic risk levels or policy needs.

In short, this system creates a multi-layered, multi-path, and scalable regulatory compliance network for stablecoins in the United States, enhancing system resilience while providing a unified institutional foundation for stablecoin overseas expansion.

The United States has taken a different route compared to MiCA

In the global stablecoin regulatory race, the European Union is the region that started the earliest and has the most complete framework. Its “MiCA Regulation,” officially implemented in 2023, incorporates all crypto tokens pegged to assets into the regulatory framework through two types: “EMT” (Electronic Money Tokens) and “ART” (Asset-Referenced Tokens), emphasizing macroprudential oversight and financial stability, with the intention of building a “firewall” in the digital financial transformation.

However, the U.S. “STABLE Act” clearly chooses another path: it does not aim to comprehensively regulate all stablecoins, nor does it build an all-encompassing regulatory system based on financial risks, but instead focuses on the core scenario of “payment stablecoins” and institutionalizes the construction of the next generation payment network on the dollar chain.

The underlying logic of this “selective legislation” is not complicated— the US dollar does not need to dominate the stablecoin world; it only needs to solidify the most critical scenarios: cross-border payments, on-chain transactions, and the global circulation of the US dollar.

This is also why the STABLE Act does not attempt to establish a comprehensive asset regulatory system similar to MiCA, but rather focuses on a “on-chain dollar” that is 1:1 backed by the dollar, has actual payment functionality, and can be widely held and used by the public.

From the perspective of institutional design, the two present a stark contrast:

• Different regulatory scopes: MiCA attempts to “cover everything”, almost encompassing all stablecoin models, including those with extremely high risk associated with reference asset products; while the U.S. STABLE Act actively narrows the scope of applicability, focusing only on assets that are truly used for payments and can represent the “function of the dollar”.
• Different regulatory goals: The EU emphasizes financial order, system stability, and consumer protection, while the United States focuses more on legally defining which assets can serve as a legitimate form of “on-chain dollars,” thereby constructing a systemic dollar payment infrastructure.
• Different issuing entities: MiCA requires that stablecoins must be issued by regulated electronic money institutions or trust companies, effectively locking the entry within the financial institution system; while the STABLE Act establishes a “new licensing mechanism,” allowing non-bank entities to legally participate in stablecoin issuance after compliance review, thus preserving the potential for Web3 entrepreneurship and innovation.
• Different reserve mechanisms: The United States requires 100% cash or short-term government bonds in USD, strictly excluding any leverage or illiquid assets; the European Union, on the other hand, allows various asset forms, including bank deposits and bonds, which also reflects different degrees of regulatory rigor in thought.
• Different adaptability to Web3 entrepreneurship: MiCA, due to its heavy reliance on traditional financial licenses and auditing processes, naturally creates high barriers for crypto startups; whereas the US STABLE Act, although demanding, leaves room for innovation in its framework, aiming to encourage the development of “on-chain dollars” through compliance standards.

In short, what the United States is pursuing is not a path of “comprehensive regulation,” but rather a systematic approach to filtering “qualifying dollar payment assets” through compliance licenses. This not only reflects a change in the United States’ acceptance of Web3 technology but also serves as a “digital extension” of its global monetary strategy.

This is also why we say that the STABLE Act is not just a financial regulatory tool, but the beginning of the institutionalization of the digital dollar system.

Summary by Lawyer Mankun

“Making the US dollar the benchmark unit for global Web3” may be the true strategic intent behind the STABLE Act.

The U.S. government is trying to build a “next-generation digital dollar network” through stablecoins, which can be programmatically recognized, audited, and integrated, to comprehensively layout the underlying protocol for Web3 payments.

It may not be perfect yet, but it is important enough at the moment.

It is worth mentioning that at the international level, the seventh edition of the IMF’s Balance of Payments Manual (BPM7), released in 2024, will include stablecoins in the international asset statistics system for the first time and emphasize their new role in cross-border payments and global financial flows. This not only lays the “global institutional legitimacy” for the sovereign compliance of stablecoins, but also provides institutional support and external recognition for the United States to build a stablecoin regulatory system and strengthen the significance of dollar pegging.

It can be said that the global institutional acceptance of stablecoins is becoming a prelude to sovereign competition in the era of digital currency.

As observed by lawyer Mankun: The compliance story of Web3 is ultimately a race of institutional construction, and USD stablecoins are the most meaningful battlefield in this race.