The stablecoin economy has bipartisan support, with the backing of significant leaders from both parties. It seems the only question now is how tight regulation is going to be.

Why it matters: Stablecoins have been the killer app of blockchains, powering trillions of dollars worth of transaction volume annually. The upshot: The U.S. dollar has become the universal coin of the realm of blockchains.

• It's no surprise then that regulating stables has been top of the agenda for years for U.S. policymakers, who've warned of a range of risks from market integrity, to criminal use, to liquidity issues that could cascade into chaos in the broader financial system.

Driving the news: House Financial Services Committee ranking member Maxine Waters (D-Calif.), put out a discussion draft of stablecoin legislation yesterday.

• This follows legislation introduced last Tuesday by Sen. Bill Hagerty (R-Tenn.) and another discussion draft two days later from House Financial Services Chair French Hill (R-Ark.) and Rep. Bryan Steil (R-Wisc.).

The big picture: Collectively, they create legal means for institutions (banks and other financial firms) to launch stablecoins backed by dollars and other highly liquid, super-safe instruments (such as short-term treasuries).

Between the lines: Where they differ is around governance. In Waters' bill, the Feds have at least one hand on the leash.

• The bills from the GOP leave more room for state regulators. Hill's and Steil's draft gives states the most room to move.
• Hagerty's bill has flexibility around smaller stablecoins, those with a market cap below $10 billion. Only the two big stablecoins — Circle's and Tether's — are bigger than that. (Until regulators smacked down Paxos' and Binance's partnership, there was another one just a little bigger: binance usd (BUSD).)

Zoom out: All the bills make it pretty clear that deposits made for stablecoins need to be used strictly for keeping the stablecoins solvent. No side bets with them or other monkey business!

Where things stand: Hagerty's bill is the only one that's been introduced, and it's got co-sponsorship from crypto champion Sen. Cynthia Lummis (R.-Wyo.) and Senate Banking Chair Tim Scott (R-S.C.).

What we're watching: In her announcement, Waters made it clear that she sought to crack down on tether (USDT), the world's largest stablecoin. Her legislation forbids the sale to U.S. citizens of stablecoins that haven't met the legislation's requirements.

• Both GOP bills, by contrast, seek to set up reciprocal arrangements with other governments that have their own way of regulating stablecoins. Tether's token, USDT, is licensed in El Salvador, according to the company CEO.
• That said, the GOP bills have other compliance requirements that, right now, Tether's USDT doesn't meet.

Our thought bubble: Here's where wags like to point out the irony that software designed to disrupt national currencies has found them useful after all. 🙄

• The internet was invented for the Department of Defense, and yet you are using it to read this newsletter. People are creative, so technology ends up being surprising!

"I will tell you that I am struck and my colleagues are struck by the growing number of cases of what appears to be de-banking, and we're determined to take a fresh look at that."

Go deeper: House GOP hears crypto firms on industry de-banking claims

• Court warns FDIC of sanctions over crypto documents

The SEC is calling for a truce in its case against Binance.

• The regulator asked the court for a 60-day stay in a joint motion filed last night.

The reason: The SEC's new crypto task force headed by Commissioner Hester Peirce, which was launched by acting chair Mark Uyeda a day after former chair Gary Gensler stepped down.

• "The work of this task force may impact and facilitate the potential resolution of this case," the motion said.

Catch up quick: The SEC charged Binance and its founder Changpeng Zhao in 2023 with a number of securities violations.

Brady's thought bubble: The No. 1 thing I'm curious about with the new Trump-era SEC: whether it drops or settles some of its cases against the biggest companies in the industry (most notably, Coinbase and Binance).

• 👀

One move to keep an eye on in the coming months: Whether or not more crypto-based ETFs hit the market.

Why it matters: These products would put many more cryptocurrencies at the fingertips of more traditional investors who want to make trades in their brokerage accounts.

The latest: Grayscale (the firm that won the fight for the bitcoin ETF) has proposed an ETF for the Cardano blockchain coin, ADA.

Zoom out: Lots of these have been proposed. Here are a few others, as examples.

• Grayscale also has a proposal in for a solana (SOL) ETF, and the SEC has acknowledged its existence.
• It also has a dogecoin (DOGE) application in.
• And Canary Capital has one in for litecoin (LTC), as well as others.
• Lots of people are trying to get into this space in case a door opens.

Fun fact: There's even a proposed ETF for meme coins, which — yes — would include Official Trump and Melania Meme.

Between the lines: If the SEC has said anything about altcoin ETFs, I have not seen it.

• But SEC Commissioner Peirce was clear that investors have every right to lose money on silly things if that's what they want to do.

The big picture: The bitcoin ETF was a wild success. The ether ETF, however, was much more muted.

• If investors went wild for the Coke of crypto but yawned at the Pepsi, just imagine their reaction to the Dr Pepper, RC Cola and Mr. Pibb of the crypto world.

💭 Our thought bubble: Through the closing days of the Gensler era, folks were acting like these had a chance. I never wrote about them because I never bought that, but it's a different SEC now.

👨‍🎓 More universities have invested in bitcoin. (FT)

👾 The man accused of hacking the SEC's Twitter account pled guilty. (Decrypt)

🚮 The greatest story in the history of cryptocurrency, the hundred-million-dollar bitcoin landfill, turns out to be not quite over yet. (The Defiant)

🗺️ Chatter about bitcoin reserves by U.S. states is bubbling up all over. (Blockworks)