Trump supports legislation for regulating risky stablecoins

Former President Donald Trump is supporting a proposal to create clear rules for "stablecoins" in the cryptocurrency industry. Stablecoins are a type of digital currency designed to keep a steady value, often pegged to the U.S. dollar. Supporters believe that making stablecoins part of the financial system could help broader acceptance of cryptocurrencies. Trump announced his support during a video address at the Digital Asset Summit 2025, urging Congress to pass new legislation. While some people in the crypto community worry this will lead to more financial risks, others see it as an opportunity for growth. However, stablecoins have been criticized for their stability and reliability, with many experiencing issues maintaining their value. Stablecoins are often used by crypto investors for trading more volatile cryptocurrencies. Some advocates want them to replace traditional payment methods, but in the U.S., using stablecoins for everyday purchases is still viewed as impractical. Critics point out that stablecoins operate similarly to bank accounts and money market funds, which are heavily regulated for good reasons. Regulators have largely overlooked the stablecoin market. The Senate's proposed bill could allow stablecoin issuers to benefit from banking privileges without facing necessary regulations, potentially leading to dangers similar to past financial crises. Concerns have also been raised about allowing major tech companies to issue their own stablecoins, which could grant them excessive control over people's finances. The growing influence of the crypto industry in Washington has led to fears that the push for stablecoin legislation could expose the entire financial system to instability. Supporters of the proposal argue for the need to modernize the financial landscape, while opponents worry it risks repeating past mistakes that led to major economic downturns.