Senator Hagerty Introduces GENIUS Act to Regulate Payment Stablecoins
US Senator Bill Hagerty has introduced the GENIUS Act, aiming to regulate payment stablecoins and enhance the US dollar's dominance. This bill represents a significant step towards establishing a legal framework for stablecoin transactions.
- The GENIUS Act defines payment stablecoins as digital assets pegged to a fixed value, required to be backed by US currency, insured demand deposits, Treasury bills, and approved assets.
- Issuers with a market cap over $10 billion will be regulated by the Federal Reserve; non-bank issuers will fall under the Office of the Comptroller of the Currency, while smaller issuers will be state-regulated but may seek exemptions.
- Only Tether (USDT) and USD Coin (USDC) currently exceed the $10 billion threshold.
- The bill mandates monthly audits of stablecoin reserves, with penalties for false reporting, and outlines licensing procedures and compliance mechanisms.
- Senator Hagerty stated stablecoins could enhance payment efficiency and boost demand for US Treasuries, aiming to create an innovative regulatory environment.
- The bill is co-sponsored by Senators Kirsten Gillibrand, Tim Scott, and Cynthia Lummis, who emphasized the importance of bipartisan regulation for the future of digital assets.
- Reports suggest that the bill may progress quickly through congressional committees, following support expressed by White House advisor David Sacks.