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ABA: The American Bankers Association
Letter to Congress & Regulators

Statement for the Record before the House Financial Services Committee on the STABLE Act

  • Published April 2, 2025

Statement for the Record on the proposed payment stablecoin legislation, H.R. 2392, the Stablecoin Transparency and Accountability for a Better Ledger Economy Act of 2025 (STABLE Act).

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The American Bankers Association (ABA) appreciates the opportunity to share our perspective on the proposed payment stablecoin legislation, H.R. 2392, the Stablecoin Transparency and Accountability for a Better Ledger Economy Act of 2025 (STABLE Act). The ABA has engaged with the Committee on this topic for several years now, and we thank Chairman Hill, Ranking Member Waters, and their staff for their diligent work on this topic. A durable regulatory framework for payment stablecoin must balance the potential for improving a customer’s payment experience with the need to limit negative economic consequences, promote financial stability, and guard against consumer protection risks. Such a framework has the potential to spur innovation, and the banking industry is ready to participate.

However, payment stablecoin has the potential to significantly disintermediate core commercial bank activity like deposit taking, and we are keenly focused on ensuring the regulatory framework mitigates that risk. Despite the name, payment stablecoin will also serve as a store of value, drawing deposits out of the banking system. Take Tether, for example. As of December 31, 2024, it held about $143 billion in reserves, with about 80% of these in US T-bills and just 0.09% in cash and bank deposits. These funds likely moved from Tether holders’ bank deposits to Tether. As nonbank payment stablecoin scales, we can expect similar dynamics - an outflow of funds from bank deposits to stablecoin reserves. This example suggests a critical question of where and how these reserves should be kept. A clear solution that mitigates the risk of bank disintermediation is that reserves, or at least some portion of them, should be held at US banks. To that end, bank deposits must be a practical option for payment stablecoin reserves, and bank regulators must allow banks of all asset sizes to safely and soundly accept these reserves as deposits.

Download the statement for the record to read the full text.

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