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Bill Hagerty Proposes Bill to Regulate Stablecoins in US

Bill Hagerty Proposes Bill to Regulate Stablecoins in US

Senator Bill Hagerty introduced the GENIUS Act to regulate US stablecoins, establishing licensure, reserve, and stringent reporting requirements.

The GENIUS Act, a bill that aims to regulate stablecoins in the United States, was introduced by Senator Bill Hagerty in the Senate today. The Guiding and Establishing National Innovation for US Stablecoins Act, which is the official name of the legislation, is designed to establish a structured regulatory framework for stablecoin issuers.

Senator Bill Hagerty Introduces a Bill to Regulate Stablecoins

As per a recent announcement, Senator Bill Hagerty introduced the bill on Tuesday to establish unambiguous regulations for issuing and supervising stablecoins. The legislation suggests regulatory obligations for issuers, emphasizing financial disclosures, reserve support, and licensing.

The GENIUS Act defines stablecoins as digital assets linked to the US dollar. It mandates that issuers maintain reserves in US currency, Treasury bills, or other approved assets.

Issuers are classified according to the magnitude of their bill. Smaller issuers would adhere to state regulations, while those with assets exceeding $10 billion would be subject to Federal Reserve regulations. The proposal also includes measures to preserve the US dollar’s dominance in global markets and promote financial inclusion.

Issuers are subject to oversight and reporting obligations

Stablecoin issuers must submit monthly audited reports on their reserves per the proposed legislation. These reports confirm that issuers have adequate security to sustain the stablecoins they have issued. The industry will be more transparent and accountable, as criminal penalties may be imposed for false reporting.

The nonbank stablecoin issuers would be supervised by the Office of the Comptroller of the Currency (OCC), an independent bureau within the Treasury Department.

This method is designed to create a regulatory framework that is conducive to innovation while simultaneously preventing the imposition of excessive restrictions. The bill aims to resolve apprehensions regarding the stability of specific stablecoins, such as Tether’s USDT, which has been scrutinized due to its reserves amid substantial profits recorded in 2024.

A Connection to Trump’s Crypto Strategy and Bipartisan Support

Senators Cynthia Lummis, Tim Scott, and Kirsten Gillibrand have all co-sponsored the GENIUS Act, which has garnered bipartisan support. As the stablecoin market grows, lawmakers from both political parties have expressed interest in establishing a regulatory framework.

The bill’s introduction is consistent with the recent initiatives of former President Donald Trump to encourage the growth of cryptocurrency in the United States, as is the case with the Strategic Bitcoin Reserve bill. Trump has pledged to reduce regulatory restrictions and promote the adoption of stablecoins.

Last month, he signed an executive action to promote the development of dollar-backed stablecoins and to impede further progress on a central bank digital currency. In contrast to the previous administration, which prioritized regulatory enforcement, his administration has adopted a more lenient stance toward cryptocurrency.

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