Senator Hagerty Introduces GENIUS Act to Potentially Regulate Tether and USD Coin in Stablecoin Framework

• US Senator Bill Hagerty’s introduction of the GENIUS Act signals a major regulatory shift for payment stablecoins, aiming to solidify the US dollar’s global dominance.

• The legislation seeks to not only regulate stablecoin issuers but also to foster innovation within the cryptocurrency sector by providing a clear framework.

• According to 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.”

Senator Hagerty’s GENIUS Act aims to provide a robust regulatory framework for stablecoins, promoting innovation and ensuring the US dollar’s dominance in the crypto space.

Senator Hagerty Pushes the Stablecoin Bill in the Senate

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

Additionally, the Act stipulates that the Federal Reserve will oversee stablecoin issuers with a market value exceeding $10 billion, adapting bank regulation practices. In contrast, nonbank issuers will come under the regulation of the Office of the Comptroller of the Currency.

Issuers with market valuations under $10 billion will be regulated at the state level; however, those surpassing this figure can seek state-regulation exemptions. Currently, only Tether (USDT) and USD Coin (USDC) exceed the $10 billion market cap threshold.

The Act mandates monthly audited reports on stablecoin reserves and imposes penalties for false reporting. Its framework outlines specific procedures for institutions looking to obtain licenses for stablecoin issuance.

Moreover, it sets reserve requirements, prescribes regulatory standards, and establishes supervisory mechanisms including examination and enforcement procedures.

Senator Hagerty has underlined that the potential benefits of such stablecoin innovation could significantly improve transaction efficiency and thereby increase the demand for US Treasuries. Emphasizing the expansive advantages of robust stablecoin development, he stated, “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.”

Bipartisan Support for Stablecoin Regulation

The GENIUS Act enjoys bipartisan support, co-sponsored by Senators Kirsten Gillibrand, Tim Scott, and Cynthia Lummis. Senator Lummis highlighted the critical nature of 2025 for digital assets, expressing concern that the US must move decisively or risk allowing other nations to lead regulatory efforts.

She urged that “Creating a bipartisan regulatory framework for stablecoins is critical to maintaining the U.S.’s dollar dominance and promoting responsible financial innovation.” This sentiment underscores the urgency conveyed by multiple key figures in Congress.

Furthermore, in a recent report by Fox Business, reporter Eleanor Terrett noted expectations for the bill to progress rapidly through the legislative process. Terrett cited Senate staffers anticipating swift movement through congressional committees, indicating a rising momentum for stablecoin legislation.

Government Support for Regulatory Measures

The anticipation surrounding the GENIUS Act has been reinforced through statements from prominent administration officials. During a press conference on February 4, David Sacks, the White House’s AI and crypto czar, expressed strong support for forthcoming stablecoin regulations, confirming that these measures will be a top priority.

Both Sacks and other House leaders echoed the belief that establishing a regulatory framework for stablecoins is integral to fostering innovation while ensuring the safety and stability of the financial system.

Conclusion

The introduction of the GENIUS Act reflects a serious commitment from US lawmakers to develop a stable and innovative ecosystem for payment stablecoins. By imposing regulations on large issuers and encouraging transparent practices, the legislation aims to bolster not only the crypto sector’s growth but also reinforce the US dollar’s dominance in the global economy. Moving forward, the advancement of this bill could reshape the landscape for digital currencies while setting a precedent for responsible financial innovation.