The U.S. Senate Banking Committee is set to vote on a bipartisan bill aimed at regulating stablecoins and enhancing consumer protection. The vote, scheduled for March 13, follows updates to the bill after consultations with committee Democrats.
Introduced by Senators Bill Hagerty (R-TN) and Tim Scott (R-SC), the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act seeks to clarify the regulatory framework for stablecoins in the U.S. The bill includes provisions addressing reserve requirements, audits, transparency, and licensing for issuers.
Senator Hagerty, one of the bill’s co-sponsors, announced the updated version of the GENIUS Act on March 10. The bill, which has seen bipartisan consultation, is co-sponsored by Republican Senators Cynthia Lummis and Tim Scott, along with Democrats Kirsten Gillibrand and Angela Alsobrooks.
“The updated version of the GENIUS Act makes significant improvements to a number of important provisions, including consumer protections, authorized stablecoin issuers, risk mitigation, state pathways, insolvency, transparency, and more,” said Senator Gillibrand in a statement.
Bringing U.S. dollar stablecoins under the fold
The bill aims to bring issuers of U.S. dollar stablecoins with market caps over $10 billion, such as Tether (USDT) and Circle’s USDC, under Federal Reserve regulations. Issuers with market caps under $10 billion could opt for state-level regulation.
Dom Kwok, co-founder of Web3 learning app EasyA, noted that the latest version of the GENIUS Act gives “US-issued stablecoins a competitive advantage” by holding foreign stablecoin issuers to “extra high standards” in areas such as reserve and liquidity requirements, money laundering checks, and sanctions compliance.
If passed, the legislation would provide a clear path for stablecoin issuers and further advance President Donald Trump’s crypto policies, as the U.S. attempts to cement regulatory clarity for the industry.
“From enhancing transaction efficiency to driving demand for U.S. Treasuries, the potential benefits of strong stablecoin innovation are immense,” said Senator Hagerty. “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.”
Fleshing out stablecoin requirements
The act allows stablecoin issuers to choose federal or state charters based on market cap and introduces “reciprocity” agreements, requiring foreign issuers to meet U.S. standards on reserves, anti-money laundering provisions, sanctions compliance, and liquidity.
Jeremy Hogan, partner at law firm Hogan & Hogan, highlighted that the bill could require issuers to comply with future orders to “seize, freeze, burn, or prevent the transfer of payment stablecoins,” placing additional operational burdens on existing issuers.
As the bill gains momentum, some experts believe the industry may be at a crossroads, with potential competition from companies like Uber and Meta. Senate Banking Committee Chairman
Shogun Lin
