The U.S. Senate has passed a bill to regulate stablecoins, marking a key step toward setting rules for a fast-growing part of the cryptocurrency market.
Following the move, the total market capitalization of stablecoins climbed to a record $251.7 billion on Wednesday, according to CoinDesk data. That marks a 22% increase since the start of the year.
Stablecoins are cryptocurrencies designed to hold a steady value, typically tied 1:1 to the U.S. dollar. They are often used by crypto traders to transfer funds between digital assets.
The bill would require stablecoins to be backed by liquid assets like U.S. dollars and short-term Treasury bills. Issuers would also need to publicly report the makeup of their reserves every month.
Supporters say stablecoins could help speed up payments. Others raise concerns about stronger connections forming between crypto and traditional financial markets. The legislation now moves to the next stage before it can become law.
