GENIUS Act: Latest Updates to Stablecoin Regulation

Senator Hagerty emphasized that strong stablecoin innovation has immense potential. This ranges from improving transaction efficiency to increasing demand for US Treasuries.

An updated version of the GENIUS Act stablecoin bill has been presented by Senator Bill Hagerty and co-sponsors Senators Tim Scott, Cynthia Lummis, and Kirsten Gillibrand.

First introduced in February, the revised bipartisan legislation incorporates feedback from a broad range of industry participants. It includes several key modifications to improve and advance the regulatory framework for stablecoins in the US.

Senator Hagerty highlighted the vast potential of strong stablecoin innovation, ranging from boosting transaction efficiency to increasing demand for US Treasuries.

“My legislation will 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,” he said.

The most notable update is the expansion of “Reciprocity for Payment Stablecoins Issued in Overseas Jurisdictions.” The original bill addressed cross-border stablecoin issuance. However, the new version broadens this section to include specific requirements for overseas stablecoins.

It mandates the Secretary of the Treasury to establish reciprocal arrangements with countries displaying similar regulatory frameworks. These arrangements cover reserve requirements, supervision, anti-money laundering, sanctions compliance, and liquidity standards. These aim to enhance international transactions and interoperability with US dollar-denominated stablecoins. The bill sets a two-year deadline for completing these agreements.

The updated GENIUS Act expands the definition of a “Comptroller-regulated entity” to include both Federal qualified nonbank payment stablecoin issuers and any organization authorized by the Comptroller.

Moreover, the bill introduces new rules for issuers regarding blocking transactions and following legal orders. The Secretary of the Treasury must consult with issuers before blocking transactions involving a foreign person’s property. However, the Secretary does not need to notify the issuer before taking action.

The Act also demands that issuers have the technology to follow legal orders. These issuers must be capable of freezing, seizing, or stopping the transfer of stablecoins if required by law. Issuers cannot offer or trade foreign stablecoins in the US unless they meet the Act’s legal obligations.

“The updated version of the GENIUS ACT makes significant improvements to a number of important provisions, including consumer protections, authorized stablecoin issuers, risk mitigation, state pathways, insolvency, transparency, and more,” Senator Gillibrand stated.

The GENIUS Act’s reintroduction occurs amid a broader push for cryptocurrency regulation in the US. On March 13, 2025, at 10:00 a.m. ET, the Senate Committee on Banking, Housing, and Urban Affairs will hold an executive session to review the bill.