The opening shot has been fired in the new Congress’ crypto push with the plan for a Tuesday introduction of a stablecoin oversight bill from Senator Bill Hagerty. This significant piece of legislation aims to create a U.S. regulatory framework for issuing dollar-denominated tokens, as reported by sources familiar with the initiative.
Senator Hagerty, a Tennessee Republican who previously shepherded a stablecoin effort in the last session, is now advocating for the Guiding and Establishing National Innovation in U.S. Stablecoins (GENIUS) Act. This bill has garnered the support of prominent figures such as the Senate Banking Committee’s new chairman, Tim Scott, and the head of its digital assets subcommittee, Cynthia Lummis. This collaboration marks a notable shift from the previous Congress, where efforts were obstructed by the crypto roadblock held by former committee chair Sherrod Brown, a Democrat from Ohio, who was defeated in November’s elections.
The GENIUS Act would define payment stablecoins and establish protocols for their issuance, designating the Federal Reserve as the watchdog for major bank issuers and the Office of the Comptroller of the Currency as the regulator for nonbank issuers with over $10 billion in assets. Additionally, the legislation outlines the reserve requirements that issuers must maintain.
For smaller issuers, state regulators would play an oversight role, while larger firms could seek waivers under certain conditions. This division between federal and state regulators was a key sticking point as Democrats and Republicans attempted to negotiate a compromise on stablecoin legislation in the previous session. The current proposal will still need to navigate bipartisan support, and it remains to be seen whether Hagerty’s lighter regulatory approach will attract Democratic backing.
In the past, the House of Representatives approved a stablecoin oversight bill, but it faced resistance in obtaining a matching Senate version, which was sought by Hagerty. Today, Hagerty is set to introduce the new legislation, following reports from Bloomberg News and confirmation from his own social media account.
Stablecoins are designed as stable cryptocurrency tokens whose value is typically pegged to other assets, most commonly the U.S. dollar. Prominent players in the global stablecoin market include Tether (USDT) and its U.S. competitor, Circle (USDC).
Later today, a press conference led by David Sacks, known as Donald Trump’s crypto czar, is scheduled to take place with congressional leaders to unveil their strategy regarding cryptocurrency. The GENIUS Act is expected to feature prominently in this discussion, paving the way for a more structured approach to stablecoin regulation in the U.S.
