Senator Bill Hagerty introduces “GENIUS” Act to provide a clear regulatory framework for payment stablecoins

Senator Bill Hagerty on X: "Today, I’m introducing the GENIUS Act w/ @SenatorTimScott, @SenGillibrand, & @SenLummis, a bill that establishes a clear regulatory framework for stablecoins.   I look forward to working with @RepFrenchHill and @FinancialCmte to get it to the President’s desk and signed into law." 

February 4, 2025 – U.S. Senator from Tennessee, Bill Hagerty has introduced the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, a bipartisan bill aimed at providing a clear regulatory framework for payment stablecoins.

The bill, co-sponsored by Senators Tim Scott, Kirsten Gillibrand, and Cynthia Lummis, seeks to establish guidelines for stablecoin issuance, oversight, and compliance.

The GENIUS Act defines a payment stablecoin as a digital asset pegged to a fixed monetary value, typically the U.S. dollar, for use in payments and settlements.

Under the bill’s provisions:

• Stablecoin issuers holding over $10 billion in assets would be regulated by the Federal Reserve and the Office of the Comptroller of the Currency (OCC).
• Issuers below the $10 billion threshold would remain under state regulatory oversight, though a waiver process is available for larger issuers seeking state regulation.
• Monthly audited reserve reports would be mandatory, with criminal penalties for providing false financial information.

The legislation also includes a ban on algorithmic stablecoins, a category of digital assets that rely on complex financial mechanisms instead of direct fiat backing.

Additionally, it mandates compliance with U.S. anti-money laundering (AML) laws and sanctions regulations.

Senator Hagerty emphasized the importance of fostering financial innovation while ensuring consumer protection.

“This bill creates 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 stated.

The GENIUS Act builds on previous legislative efforts, including the Clarity for Payment Stablecoins Act, which was introduced as a discussion draft in October 2024.

The bill has already gained attention among lawmakers and financial regulators. Senator Hagerty confirmed his intent to work with Representative French Hill and the House Financial Services Committee to advance the bill.

Financial analysts note that the stablecoin market currently stands at $227 billion, with firms like Bitwise predicting it could reach $400 billion by year-end.

The legislation could provide long-awaited clarity for major stablecoin issuers such as Tether (USDT) and Circle’s USD Coin (USDC), both of which have market caps exceeding $10 billion.

The introduction of the GENIUS Act signals renewed bipartisan interest in stablecoin regulation as the U.S. seeks to maintain its leadership in global financial innovation.

With growing support, Senate staffers anticipate swift movement through committees, potentially making this a legislative development in 2025.