Just In: Senator Bill Hagerty Introduces Bill to Regulate Stablecoins in the US

Senator Bill Hagerty has introduced the GENIUS Act in the Senate, a bill that seeks to regulate stablecoins in the United States. The legislation, officially called the Guiding and Establishing National Innovation for US Stablecoins Act, aims to provide a structured regulatory framework for stablecoin issuers.

Senator Bill Hagerty Introduces Bill to Regulate Stablecoins

According to a recent announcement, Senator Bill Hagerty introduced the bill on Tuesday, with the goal of creating clear rules for stablecoin issuance and oversight. The legislation proposes regulatory requirements for issuers, focusing on licensing, reserve backing, and financial disclosures.

The GENIUS Act defines stablecoins as digital assets tied to the US dollar and specifies that issuers must maintain reserves in US currency, Treasury bills, or other approved assets.

The bill categorizes issuers based on their size. Those holding more than $10 billion in assets would be regulated under Federal Reserve rules, while smaller issuers would follow state regulations. The proposal also includes measures to promote financial inclusion and maintain the US dollar’s dominance in global markets.

Oversight and Reporting Requirements for Issuers

Under the proposed legislation, stablecoin issuers must provide audited reports on their reserves every month. These reports would verify that issuers hold sufficient backing to support their issued stablecoins. Any false reporting could result in criminal penalties, ensuring greater transparency and accountability in the industry.

The Office of the Comptroller of the Currency (OCC), an independent bureau within the Treasury Department, would oversee nonbank stablecoin issuers.

This approach aims to establish a regulatory framework while preventing excessive restrictions that could hinder innovation. The bill seeks to address concerns about the stability of certain stablecoins, including Tether’s USDT, which has faced scrutiny regarding its reserves amid massive profits recorded in 2024.

Bipartisan Support and Connection to Trump’s Crypto Strategy

The GENIUS Act has received bipartisan support, with Senators Kirsten Gillibrand, Tim Scott, and Cynthia Lummis co-sponsoring the bill. Lawmakers from both parties have expressed interest in establishing a regulatory structure for stablecoins, as the market continues to expand.

Like the Strategic Bitcoin Reserve bill, the introduction of the bill aligns with former President Donald Trump’s recent efforts to promote cryptocurrency growth in the US. Trump has committed to easing regulatory constraints and supporting stablecoin adoption.

Last month, he signed an executive action to encourage the development of dollar-backed stablecoins while blocking further work on a central bank digital currency. His administration has taken a more favorable stance on crypto compared to the previous administration, which prioritized regulatory enforcement.