U.S. lawmakers are moving ahead with a new stablecoin bill that would tighten oversight of both fiat-backed and algorithmic digital tokens, reflecting growing concern over market stability and reserve transparency.

The proposed measure comes as major issuers such as Tether and Circle face fresh scrutiny over how they back their coins and whether disclosures are strong enough to reassure investors and regulators. Supporters of the bill argue that clearer rules are needed to reduce the risk of a wider financial shock if a major stablecoin loses its peg.

Algorithmic stablecoins, which rely on code and trading incentives rather than direct cash reserves, have drawn particular attention because of their history of dramatic failures. Regulators and lawmakers say the sector needs firmer guardrails before it expands further into mainstream finance.

The legislation is still making its way through the policy process, but its momentum signals that Washington is likely to keep pressure on the crypto industry over transparency, consumer protection, and systemic risk.