Based on the premise that "stablecoins must be 1:1 redeemable", the STABLE Act further clarifies the types of reserve assets, management methods, and audit mechanisms, intending to control risks from the source and avoid the potential hazards of "superficial anchoring and substantial hollowness".
Specifically, the act requires all payment stablecoin issuers to:
- Hold an equivalent amount of "high-quality liquid assets", including cash, short-term US Treasury bonds, Federal Reserve account deposits, etc., to guarantee user redemption requests;
- Prohibit using reserve assets for lending, investment, or other purposes, preventing systemic risks caused by "using reserve funds for revenue";
- Fulfill periodic independent audit and regulatory reporting obligations, including reserve transparency disclosure, risk exposure reports, and asset portfolio descriptions, to ensure both the public and regulatory agencies can understand the asset base behind stablecoins;
- Reserve assets must be isolated and stored in FDIC-insured banks or other compliant custodial institution accounts, preventing project parties from mixing them into their own fund pools.
This institutional arrangement aims to ensure that "anchoring" is real, auditable, and fully redeemable, rather than "verbally anchored and chain-based floating profits". From historical experience, the stablecoin market has repeatedly experienced credit crises due to insufficient reserves, fund misappropriation, or lack of information disclosure. The STABLE Act seeks to plug these risk points at the institutional level and strengthen the "institutional endorsement" of the US dollar anchor.
On this basis, the act also grants the Federal Reserve, Treasury Department, and designated regulatory agencies long-term supervision rights over reserve management, including freezing non-compliant accounts, suspending issuance rights, and mandatory redemption, forming a relatively complete stablecoin credit loop.
4. Establishing a "Registration System" to Bring All Issuers Under Regulation
In its regulatory pathway design, the STABLE Act does not adopt a "license classification management" approach but establishes a unified registration access mechanism. The core point is that all institutions intending to issue payment stablecoins, whether banks or not, must register with the Federal Reserve and undergo federal-level regulatory review.
The act sets two legal issuer pathways: first, federally or state-regulated deposit institutions can directly apply to issue payment stablecoins; second, non-deposit institutions can register as stablecoin issuers by meeting the Federal Reserve's prudent requirements.
The act also emphasizes that the Federal Reserve not only has the right to approve registration but can also refuse registration or revoke it when systemic risks are perceived. Additionally, the Federal Reserve is granted continuous review rights over all issuers' reserve structures, solvency, capital ratios, and risk management policies.
This means that in the future, all US dollar payment stablecoin issuances must be incorporated into the federal regulatory network, no longer allowing bypassing review through "state-only registration" or "technological neutrality".
Compared to previous more lenient multi-path discussion proposals (such as the GENIUS Act allowing state regulatory initiation), the STABLE Act clearly demonstrates stronger regulatory uniformity and federal leadership, attempting to establish the legal boundaries of US dollar stablecoins through a "nationwide registration and supervision system".
5. Establishing a Federal Licensing Mechanism with Clear Diverse Regulatory Pathways
The STABLE Act also establishes a federal-level stablecoin issuance licensing system and provides diverse compliance paths for different types of issuers. This institutional arrangement continues the US financial regulatory system's "federal-state dual-track" structure while responding to market expectations for flexible compliance thresholds.
The act sets three optional paths for "payment stablecoin" issuance:
- First, becoming a federally recognized payment stablecoin issuer, directly subject to review and licensing by US federal banking regulatory agencies (such as OCC, FDIC, etc.);
- Second, issuing stablecoins as a licensed savings or commercial bank, enjoying higher trust endorsement but needing to meet traditional bank capital and risk control requirements;
- Third, operating on a state-level license basis but must undergo federal-level "registration + supervision" and meet unified standards for reserves, transparency, and anti-money laundering.
The intention behind this institutional design is to encourage stablecoin issuers to legally "register on-chain" and enter the financial regulatory perspective without "one-size-fits-all" forcing bank-like compliance, thus protecting innovation while maintaining controllable risks.
Additionally, the STABLE Act grants broader coordination powers to the Federal Reserve and Treasury Department, allowing them to propose additional requirements for stablecoin issuance, custody, and trading based on systemic risk levels or policy needs.
In short, this system creates a multi-level, multi-path, and gradable regulatory compliance network for the United States, enhancing system resilience and providing a unified institutional foundation for stablecoin internationalization.
Compared to MiCA, the United States Chooses a Different Path
In the global stablecoin regulatory race, the EU was the earliest starter with the most comprehensive framework. Its MiCA Act, formally implemented in 2023, covers all asset-anchored crypto tokens through "EMT" (electronic money tokens) and "ART" (asset reference tokens), emphasizing macro-prudential approach and financial stability, intending to build a "firewall" in digital financial transformation.
However, the US STABLE Act clearly chooses a different path: not comprehensively managing all stablecoins or building an all-encompassing regulatory system from financial risk perspectives, but focusing on the "payment stablecoin" core scenario to build the next-generation payment network on the dollar chain through institutionalization.
The logic behind this "selective legislation" is not complex - the US dollar does not need to "dominate" the stablecoin world; it only needs to consolidate the most critical scenario: cross-border payments, on-chain transactions, and global dollar circulation.
This is why the STABLE Act does not attempt to establish a comprehensive asset regulatory system like MiCA but focuses on 1:1 US dollar support, actual payment functionality, and stablecoins that can be widely held and used as "on-chain dollars".
From an institutional design perspective, the two present stark contrasts:
- Different regulatory scopes: MiCA attempts to "catch everything", almost covering all stablecoin models, including high-risk reference asset products; while the US STABLE Act actively narrows its application range, focusing only on assets truly used for payment and representing "dollar functions".
- Different regulatory objectives: The EU emphasizes financial order, system stability, and consumer protection, while the US focuses more on legally clarifying which assets can be legitimate forms of "on-chain dollars", thereby building an institutional dollar payment infrastructure.
- Different issuing entities: MiCA requires stablecoins to be issued by regulated electronic money institutions or trusted companies, almost locking the entry within the financial institution system; while the STABLE Act establishes a "new license mechanism" allowing non-bank entities to participate in stablecoin issuance after compliant review, thus preserving Web3 entrepreneurship and innovation possibilities.
- Different reserve mechanisms: The US requires 100% US dollar cash or short-term government bonds, strictly excluding any leverage or illiquid assets; the EU allows various asset forms including bank deposits and bonds, reflecting different levels of regulatory rigor.
- Different Web3 startup adaptability: MiCA naturally creates high barriers for crypto startups due to heavy reliance on traditional financial licenses and audit processes; while the US STABLE Act, though strict, leaves innovation space in its institutional design, aiming to encourage "on-chain dollar" development through compliance standards.
In essence, the United States has not chosen a "comprehensive management" route but a institutional path of selecting "dollar payment qualified assets" through compliance licenses. This not only reflects the US's changing acceptance of Web3 technology but is also a "digital extension" of its global monetary strategy.
This is also why we say that the STABLE Act is not just a simple financial regulatory tool, but the beginning of the institutionalization of the digital dollar system. Mankun Lawyer's Summary
Making the dollar the benchmark unit for global Web3 may be the real strategic intent behind the STABLE Act.
The U.S. government is trying to build a "new generation of digital dollar network" through stablecoins that can be program-identified, auditable, and integrable, to comprehensively layout the underlying payment protocol of Web3.
It may not be perfect, but it is important enough at present.
It is worth mentioning that at the international level, the seventh edition of the Balance of Payments Manual (BPM7) published by the IMF in 2024 has, for the first time, included stablecoins in the international asset statistical system and emphasized their new role in cross-border payments and global financial flows. This not only establishes the "global institutional legitimacy" for stablecoin sovereign compliance but also provides institutional support and external recognition for the U.S. to build a stablecoin regulatory system and strengthen the dollar's anchoring significance.
It can be said that the global institutional acceptance of stablecoins is becoming a prelude to sovereign competition in the digital currency era.
As Mankun Lawyer observed: The compliance story of Web3 is ultimately a race of institutional construction, and the U.S. dollar stablecoin is the most realistic battlefield of this race.
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