The post Just In: Senator Hagerty Introduces GENIUS Act to Regulate Stablecoins appeared first on Coinpedia Fintech News
In a latest development, FOX Business journalist Eleanor Terrett revealed in an X post that Senator Bill Hagerty is set to introduce legislation to establish a regulatory framework for stablecoins, representing the latest effort to promote crypto-friendly policies for an industry prioritized by Donald Trump. This signals clear regulations and a massive boost for stablecoin adoption in the U.S.
Regulatory Framework For Stablecoins
The bill aims to create a clear regulatory framework for stablecoins, which are cryptocurrencies pegged to the US dollar or other stable assets. Supporters believe federal regulation will legitimize the asset class leading to broader adoption.
The bill is called the GENIUS (Guiding and Establishing National Innovation in U.S. Stablecoins) Act and aims to provide clear regulations for stablecoins. The GENIUS Act sets rules for issuing stablecoin payments and requires backing with US currency, Treasury bills, Federal Reserve notes and other assets. Stablecoins are key in connecting crypto to traditional finance, according to the bill’s draft seen by Bloomberg.
She also shared the bill’s key points, based on Hagerty’s October draft. The bill sets clear rules for stablecoins, digital assets pegged to the U.S. dollar, ensuring stability in value. Stablecoin issuers must meet specific licensing and reserve requirements to ensure they have sufficient backing. Issuers with over $10 billion in stablecoin assets will follow Federal Reserve rules, while smaller issuers will follow state regulations. The bill aims to promote financial inclusion, make transactions more efficient, and strengthen the U.S. dollar globally.
Unleashing Innovation!
“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,” Hagerty, a Tennessee Republican, noted in a statement.
Senators Kirsten Gillibrand, a New York Democrat, Tim Scott of South Carolina and Cynthia Lummis of Wyoming, both Republicans, are co-sponsoring the bill. The legislation also requires stablecoin issuers to provide audited monthly reports on the reserves backing their stablecoins. Falsifying reports would lead to criminal penalties.
Senate staffers expect the bill to move through committees quickly, and it will be discussed further in an upcoming press conference with DavidSacks.
Trump’s Order Backs Dollar-Backed Stablecoins
Nonbank stablecoin issuers would be regulated by the Office of the Comptroller of the Currency, part of the Treasury Department. Last month, Trump signed an executive order encouraging the development of lawful, dollar-backed stablecoins globally. The order also blocked further progress on a central bank digital currency, seen as a competitor to stablecoins.
While it set up a group to recommend a digital asset regulatory framework, the actual policy change would have to be approved by Congress. Both Democrats and Republicans are interested in regulating stablecoins.
