Stablecoin Bill Clears Committee as Banks Eye On-Chain Dollars

The quietest room in Washington produced the loudest signal for digital dollars. A key House committee advanced the Payment Stablecoin Act with bipartisan support, sending the first federal framework for dollar tokens to a full floor vote. The draft forces 1:1 reserves in cash and T-bills, monthly attestations, and a ban on algorithmic variants without collateral. That last clause matters. Issuers like Circle and Paxos gain clarity, while offshore players face a choice: comply or lose U.S. payment rails.

Markets moved before the gavel. USDC supply grew $640 million in 48 hours as prime brokers shifted collateral from regional banks to on-chain venues ahead of potential approval. Tether printed $1 billion on Tron, but its dominance slipped to 61% as regulated options gained share. The real tell came from repo desks. Overnight rates for USDC-backed loans dropped 37 bps, a sign that treasurers now view the token as near-cash, not crypto exposure.

Banks are reading the same draft. JPMorgan’s deposit token pilot expanded to five corporate clients, and BNY Mellon confirmed it is building custody for “permitted payment stablecoins” under the bill’s definition. If passed, the law would let insured depositories issue tokens directly, collapsing the spread between fintech issuers and traditional lenders.

Edge risk sits with state charters. The bill preserves dual licensing, so New York and Wyoming can still set stricter terms, creating arbitrage until federal preemption is tested. Traders are positioning early: options on COIN and SQ saw call skew rise as the vote neared, while DeFi rates on Aave and Compound dipped, reflecting expectations of cheaper on-chain dollars.

Should the Act become law, stablecoins graduate from crypto plumbing to regulated money. That rewrites settlement, payroll, and treasury playbooks in one stroke.

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