US Senator Bill Hagerty has introduced the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act to the Senate. 

This follows the release of a discussion draft in October, marking a significant step toward creating a regulatory framework for stablecoins payment.

Senator Hagerty Pushes the Stablecoin Bill in the Senate

The GENIUS Act defines a payment stablecoin as a digital asset used for payments or settlements, pegged to a fixed monetary value. Under the legislation, stablecoin payments must be backed by US currency, demand deposits at insured institutions, Treasury bills, and other assets. 

Furthermore, it mandates Federal Reserve oversight on stablecoin issuers with a market value exceeding $10 billion, following bank regulations. In contrast, the Office of the Comptroller of the Currency regulates nonbank issuers. 

Issuers with a market value below $10 billion are subject to state regulation. However, those above the threshold may apply for state-regulation exemption. 

For now, Tether (USDT) and USD Coin (USDC) are the only stablecoins exceeding the $10 billion market capitalization threshold.

The Act also requires monthly audited reports on stablecoin reserves, with penalties for false reporting. It outlines clear procedures for institutions seeking licenses to issue stablecoins. 

Moreover, it establishes reserve requirements, tailored regulatory standards, and supervisory, examination, and enforcement mechanisms with defined limitations.

In the latest statement, Senator Hagerty emphasized the potential benefits of stablecoin innovation, highlighting how it could enhance transaction efficiency and drive demand for US Treasuries. He noted that the advantages of strong stablecoin development are vast and far-reaching.

“My legislation establishes a safe and pro-growth regulatory framework that will unleash innovation and advance the President’s mission to make America the world capital of crypto,” he stated.

Notably, the bill is co-sponsored by Senators Kirsten Gillibrand, Tim Scott, and Cynthia Lummis. 

In a social media post, Lummis stressed that 2025 is a pivotal year for digital assets. She warned that the US must take action and not allow other countries to lead in establishing regulations for stablecoins.

“Creating a bipartisan regulatory framework for stablecoins is critical to maintaining the U.S.’s dollar dominance and promoting responsible financial innovation,” Lummis added.

Meanwhile, Fox Business reporter Eleanor Terrett reported that there are expectations for the bill to advance swiftly.

“Senate staffers tell me they expect the bill to move quickly through committees in Congress,” Terrett wrote on X.

This comes after a press conference on February 4, where David Sacks, the White House’s AI and crypto czar, voiced his support for stablecoin legislation in the near future. Sacks, along with other House leaders, stated that stablecoin regulation will be a top priority.

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