- Democrats raised concerns about conflicts of interest with the Trump family’s stablecoin during a markup hearing on the STABLE Act.
- Several Democrats support the bill’s substance but proposed amendments to prevent administration officials from controlling stablecoins.
- Republicans deliberately excluded restrictions on businesses issuing stablecoins, while Democrats pushed for separation between commerce and stablecoin issuance.
During a House markup hearing on the STABLE Act, Democrats shifted focus from the bill’s substance to potential conflicts of interest created by World Liberty Financial’s stablecoin, USD1. The company, 60% owned by the Trump family, announced its stablecoin plans last week, complicating legislative efforts according to House Financial Services Committee Chair French Hill.
Committee Ranking Member Waters expressed strong opposition, stating, “If there is no effort to block the President of the United States from owning a stablecoin business, just as he owns crypto, which is his largest asset now, I will never be able to agree on supporting this bill.” She urged other members not to enable the President “to get away with this.”
The hearing contrasted sharply with the Senate’s brief, substantive-focused discussion. For approximately 2.5 hours, debate centered on the Trump stablecoin before addressing other amendments. Many Democrat committee members indicated they substantially support the bill but have serious reservations about the Trump family’s involvement in stablecoins.
Proposed Amendments Targeting Conflicts of Interest
Waters and Congressman Liccardo proposed several amendments aimed at preventing administration members or their families from receiving advance notice of rulemaking, prohibiting federal officials from sponsoring stablecoins to prevent foreign influence, and blocking government use of stablecoins affiliated with the administration.
Congressman Foster raised concerns about stablecoin bailouts, questioning whether state-regulated stablecoins would receive state bailouts. Representative Lynch highlighted potential self-dealing, noting the President could authorize taxpayer funding to bail out his family-owned stablecoin.
The bill’s sponsor, Congressman Steil, maintained that the amendments were unnecessary since the legislation treats all issuers equally. Lynch countered that the President’s position of trust and bailout authority creates unique concerns.
Democrat Support Despite Reservations
Several Democrats expressed support for the bill despite concerns. Congressman Meeks backed the state pathway option for stablecoins, noting New York’s dominance in issuance, though he acknowledged the World Liberty stablecoin was undermining bipartisan negotiations.
“Though the President’s actions have caused me to pause, (because of) the certainty issue, and to make sure that we have clear rules of the game, I’m going to support the Stable Act,” Meeks stated.
Democrat Scott expressed concern about conflicts of interest while remaining respectful of the President. Meanwhile, Congressman Carstens raised concerns about World Liberty Financial’s connection to Justin Sun, alleging potential Chinese Communist Party ties that might violate the Constitution’s emoluments clause.
Republicans deliberately excluded restrictions on businesses issuing stablecoins, arguing that unlike banks, stablecoin issuers aren’t involved in lending. Democrats countered with amendments to separate stablecoins from commerce, warning that companies like Meta or X could otherwise issue stablecoins.
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