Bipartisan senators introduce GENIUS Act for stablecoin regulation

Today, a group of U.S. Senators introduced the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, aiming to create a regulatory framework for payment stablecoins. The bipartisan effort is led by Chairman Tim Scott (R-S.C.) alongside Senate Banking Committee members Bill Hagerty (R-Tenn.), Cynthia Lummis (R-Wyo.), and Kirsten Gillibrand (D-N.Y.).

Chairman Scott emphasized the role of stablecoins in enabling efficient digital transactions and cross-border payments. He stated, "This legislation will expand financial inclusion and provide much-needed clarity to ensure the industry can innovate and grow here in the United States, while protecting consumers and promoting the U.S. dollar’s global position."

Senator Hagerty highlighted the potential benefits of stablecoin innovation, including enhancing transaction efficiency and increasing demand for U.S. Treasuries. He expressed his commitment to advancing this legislation with House Financial Services Chairman French Hill.

Senator Lummis pointed out the importance of a bipartisan regulatory framework for maintaining U.S. dollar dominance and supporting responsible financial innovation. She noted that the legislation aligns with Wyoming's regulatory approach to digital assets.

Senator Gillibrand underscored the need for clear regulations to protect consumers while fostering innovation in digital assets and blockchain technology. She mentioned that the GENIUS Act requires stablecoin issuers to maintain one-to-one reserves, prohibits algorithmic stablecoins, and enforces compliance with anti-money-laundering rules.

The GENIUS Act defines payment stablecoins as digital assets pegged to a fixed monetary value used for payments or settlements. It sets procedures for licensing institutions wishing to issue stablecoins, implements reserve requirements, applies regulatory frameworks based on market capitalization thresholds, allows state regulation under certain conditions, and establishes supervisory regimes.

The full text of the GENIUS Act is available online along with an overview document.