Washington, D.C. – The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, led by Senator Bill Hagerty and co-sponsored by several others, seeks to set a regulatory framework for stablecoins in the U.S. In a legislative markup, Chairman Tim Scott highlighted the bill as a bipartisan effort to enhance national security, with the committee passing it 18-6.
The GENIUS Act introduces requirements for stablecoin issuers to fortify national security and improve the Treasury Department’s oversight. The legislation builds on existing authorities to address illicit stablecoin activities, reinforcing the U.S. dollar’s position globally and aligning with U.S. sanctions and law enforcement priorities. Without this bill, firms might shift offshore, facing weaker regulations.
The Act classifies payment stablecoin issuers as financial institutions under the Bank Secrecy Act, requiring them to maintain compliance programs, verify transactions, and report suspicious activities. Issuers must also have technical capabilities to freeze transactions in compliance with lawful orders, coordinating with law enforcement as needed. Foreign issuers failing to comply may be designated as non-compliant by the Treasury Department.
Further, the GENIUS Act enhances the Treasury’s role in sanctions enforcement, requiring coordination with stablecoin issuers when blocking transactions involving foreign entities.
For more detailed information, readers are directed to the full Fact Sheet.
