A U.S. Senate Banking Committee has advanced a bipartisan bill aimed at bringing stricter oversight to stablecoins, a fast-growing corner of the crypto market used for payments and trading. The measure would require issuers to hold reserves and come under clearer regulatory supervision.

The proposal targets major tokens such as USDT and USDC, along with algorithmic stablecoins, which have drawn scrutiny from lawmakers after repeated concerns about reserve backing, market stability, and consumer risk.

Supporters argue the legislation is needed to set basic standards for a sector that has expanded rapidly without a consistent federal framework. They say reserve requirements and supervision could improve transparency and reduce the chance of losses for users.

The bill still faces further debate before it can become law, but the committee vote marks another step in Washington’s push to define rules for digital assets and bring stablecoin issuers under firmer oversight.