"Hagerty's GENIUS Act: Bipartisan Push for Stablecoin Regulation"

Senator Bill Hagerty, a Republican from Tennessee, has introduced the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, a bipartisan legislation aimed at creating a comprehensive regulatory framework for stablecoins. The bill, introduced on Tuesday, seeks to establish clear guidelines for issuing and managing these digital assets, which are pegged to the US dollar.

The GENIUS Act proposes rules for stablecoin payments, requiring issuers to back tokens with US currency, Federal Reserve notes, Treasury bills, and other approved assets. The legislation mandates that stablecoin issuers submit monthly audited reports on their reserves and imposes criminal penalties for providing false information. This focus on transparency comes as the stablecoin market has surged to $205 billion, with Tether’s USDT token maintaining market dominance at a $140 billion market cap.

The bill has gained bipartisan support, with Senators Kirsten Gillibrand, Tim Scott, and Cynthia Lummis serving as co-sponsors. The legislation aims to establish 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. The move follows President Donald Trump’s recent executive action promoting dollar-backed stablecoins while opposing central bank digital currency development.

Under the act, nonbank stablecoin issuers would be supervised by the Office of the Comptroller of the Currency, a Treasury Department bureau. The legislation establishes licensing and reserve requirements for stablecoin issuers, with companies with assets exceeding $10 billion regulated by the Federal Reserve and those with assets below that threshold following state-level regulations. The bill also mandates that stablecoin reserves consist of US currency, Treasury bills, and other approved assets.

The GENIUS Act outlines strict reporting requirements for stablecoin issuers to ensure transparency. Issuers would be required to submit audited reports every month detailing the reserves backing their stablecoins. False reporting would carry criminal penalties. Nonbank stablecoin issuers would fall under the supervision of the Office of the Comptroller of the Currency, an independent bureau within the Treasury Department. This measure aims to establish federal oversight while allowing innovation in the crypto industry.