What Are Stablecoins?

What kind of legislation is being considered?
Both the House and Senate have passed stablecoin bills—The STABLE and GENIUS Acts, respectively—out of their respective committees. The bills lay out guidelines for how stablecoins will be regulated, and the amount and types of reserves stablecoin issuers must have on hand. The House and Senate will now have the opportunity to reconcile the two bills in the hopes of getting a unified bill onto President Trump’s desk by the summer.
If legislation passes, many financial institutions would likely seek to create their own stablecoin. Bank of America, for instance, said it would launch a stablecoin once lawmakers make it legal to do so. PayPal and Stripe have also announced stablecoin initiatives.
What are the main critiques of stablecoin legislation?
The appetite in Washington for a stablecoin bill is high among legislators on both sides of the aisle. But some lawmakers have raised concerns. Elizabeth Warren, one of the most vocal crypto skeptics in Congress, has argued that the legitimization of stablecoins comes with systemic risks, especially because they could be susceptible to bank runs. In 2022, the stablecoin UST caused a massive crypto crash when it lost its dollar peg and hurtled to zero. UST, however, was an algorithmic stablecoin, a type of currency that the STABLE Act bans from getting federal approval for two years.