Yesterday Congressman French Hill, Chair of the House Financial Services Committee, discussed the differences between the House and Senate stablecoin bills, the STABLE Act and the GENIUS Act. With the GENIUS Act likely to get a full Senate vote within the next ten days, there’s a need to reconcile the two bills between Congressional chambers in order to become law.

During an Atlantic Council event, the Chair said, “The differences are narrow and they can be bridged to have successful stablecoin legislation.”

“We have I think a cleaner State-Federal pathway than the Senate bill, with OCC for non banks, bank supervisors for banks. And we preserve a state pathway but you can have a Federal charter. There’s not an intermediate step as there is in the Senate Bill,” he said.

While the Senate’s GENIUS Act designates the same regulators, if a stablecoin issuance passes the $10 billion mark, the issuer has to become federally regulated. Non bank payment stablecoin issuers with smaller issuances can opt to be federally regulated. The House bill does not distinguish between different sizes of stablecoin issuers.

Beyond regulatory structure, the bills also differ on who can control stablecoin issuers.

Separation of commerce and banking

The Congressman discussed differences regarding limiting the involvement of public companies and big tech firms. The rationale is the historical separation between banking and commerce. He noted that a House stablecoin bill from a couple of years ago included a clause that prevented a non bank holding company from owning more than 24.9% of a stablecoin issuer. But currently the House’s STABLE Act has no restrictions at all.

By contrast, the GENIUS Act has a clause preventing a public company from owning an issuer. That was recently extended to include foreign public companies. This applies to all public companies, although legislators had big tech particularly in mind when drafting it.

“Publicly trade big tech companies couldn’t be an issuer. All that has to be clarified,” Chair French Hill observed, referring to the Senate bill. “Do you want to have public companies penalized but private companies not?”

Foreign stablecoin issuers

Another difference is how the two bills treat foreign stablecoin issuers that want to do business in the United States. He agreed that the House version is stricter than the Senate’s which is not yet final.

Both sets of legislation allow for the Secretary of the Treasury to recognize issuers from jurisdictions with substantially similar rules to the United States. The issuer has to agree to US reporting and examination requirements.

However, we’d note that there are several differences between the two. The Senate bill gives oversight to the Comptroller, whereas the House bill splits oversight between the Comptroller for non bank stablecoins and the Federal Reserve for foreign bank stablecoins, which seems rather logical.

The Senate’s GENIUS Act gives the Secretary quite wide latitude to permit access to a foreign stablecoin issuer that wouldn’t otherwise comply with US requirements, especially in exigent circumstances. In the past few days the GENIUS wording has been tightened to require the Treasury to justify why they have allowed exceptions. Additionally, there is a Committee consisting of the Treasury Secretary and the Chairs of the Federal Reserve and FDIC that has veto power.

In general the GENIUS Act uses this Committee to add checks and balances in various areas compared to the House bill which gives the Secretary of the Treasury considerable powers. Yesterday we wrote about the potential conflict of interest with the Treasury both issuing Treasury bills and having some power over the investors in those bills.

Without explicitly talking about the Treasury’s dual role, Chair French Hill played down the impact of stablecoin issuers investing in Treasuries, noting that it primarily impacts short term interest rates rather than the yield curve.

No yield bearing coins

The topic of interest was also discussed. Earlier iterations of the Senate bill didn’t mention any bans on payment of interest, but both bills currently include one.

Talking about yield, the Congressman said, “It’s a payment rail…It’s not a money market account. So the idea in both the House and Senate bills is that a dollar backed payment stablecoin is not a yield bearing activity.”

With both chambers moving toward votes on their respective bills, there are still key areas requiring reconciliation. These issues – federal oversight thresholds, corporate ownership restrictions, and foreign issuer requirements – will likely determine whether comprehensive stablecoin regulation becomes law before the summer recess.