Senator Bill Hagerty Introduces Stablecoin Bill in the Senate, Signaling Clear Regulations and a Massive Boost for Stablecoin Adoption in the U.S.

The bill is called the GENIUS (Guiding and Establishing National Innovation in U.S. Stablecoins) Act and aims to provide clear regulations for stablecoins.

Senator Bill Hagerty is set to introduce legislation in the Senate to establish a regulatory framework for stablecoins, part of a broader effort to promote crypto-friendly policies that have been championed by Donald Trump.

The bill, called the GENIUS (Guiding and Establishing National Innovation in U.S. Stablecoins) Act, aims to provide clear regulations for stablecoins, a type of cryptocurrency that is pegged to the value of the U.S. dollar.

According to the bill’s draft, which was obtained by Bloomberg, the aim is to have stablecoins serve as a bridge between crypto and traditional finance. Supporters believe that federal regulation will legitimize the asset class and lead to broader adoption.

Here are the key points of the bill, as shared by Wu on Twitter:

According to Hagerty's October draft, the bill sets clear rules for stablecoins, which are digital assets pegged to the U.S. dollar to ensure stability in value. Stablecoin issuers must meet specific licensing and reserve requirements to ensure they have sufficient backing. Issuers with over $10 billion in stablecoin assets will follow Federal Reserve rules, while smaller issuers will follow state regulations. The bill aims to promote financial inclusion, make transactions more efficient and strengthen the U.S. dollar globally.

“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,” Hagerty, a Tennessee Republican, said in a statement.

The bill is being co-sponsored by Senators Kirsten Gillibrand (D-NY), Tim Scott (R-SC) and Cynthia Lummis (R-WY). It also mandates that stablecoin issuers file audited monthly reports on the reserves backing their stablecoins. Falsifying reports would be subject to criminal penalties.

According to Senate staffers, the bill is expected to move quickly through committees and will be discussed further in an upcoming press conference with David Sacks.

Nonbank stablecoin issuers would be regulated by the Office of the Comptroller of the Currency, which is part of the Treasury Department. Last month, Trump signed an executive order that encourages the development of lawful, dollar-backed stablecoins around the world. The order also halted further progress on a central bank digital currency, which is seen as a competitor to stablecoins.

While the order does set up a group to recommend a digital asset regulatory framework, any actual policy changes would need to be approved by Congress. Notably, both Democrats and Republicans have expressed interest in regulating stablecoins.