This week, the U.S. Senate Banking Committee plans to vote on a bipartisan bill aimed at regulating stablecoins and enhancing consumer protection.
Introduced by Senators Bill Hagerty (R-TN) and Tim Scott (R-SC), the GENIUS Act seeks to clarify the regulatory framework for stablecoins in the U.S., with provisions addressing reserve requirements, audits, transparency, and licensing for issuers.
If passed Thursday, the legislation would provide a clear path for stablecoin issuers and further advance President Donald Trump’s crypto policies as the U.S. attempts to cement regulatory clarity for the industry.
“From enhancing transaction efficiency to driving demand for U.S. Treasuries, the potential benefits of strong stablecoin innovation are immense,” Sen. Hagerty said in a statement.
“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,” he said.
Stablecoin Legislation Could Unleash 1,000 Tether and USDC Rivals, Expert Says
As lawmakers hash out a federal framework for stablecoins in the U.S., corners of the crypto industry may soon face competition from the likes of Uber and Meta. Senate Banking Committee Chairman Tim Scott (R-SC) vowed this month that a stablecoin bill, dubbed the GENIUS Act, will be passed by both chambers of Congress and signed into law within the first 100 days of President Donald Trump’s administration. As the bill gains momentum, some experts say the industry may be at a crossroads. While th...
The act allows stablecoin issuers to choose federal or state charters based on market cap. It also introduces "reciprocity" agreements, requiring foreign issuers to meet U.S. standards on reserves, anti-money laundering provisions, sanctions compliance, and liquidity.
“The reserve requirements, anti-money laundering requirements, all fall neatly for RLSUD and USDC.,” Jeremy Hogan, partner at law firm Hogan & Hogan, wrote on X on Monday, pointing to issuers Ripple and Circle while echoing sentiment shared by others across the crypto community.
He added that the bill could require issuers to comply with future orders that may instruct them to "seize, freeze, burn, or prevent the transfer of payment stablecoins" or else block digital assets and accounts with "reasonable particularity."
That would give U.S. authorities the power to control digital assets within their jurisdiction and places additional operational burdens on existing issuers.
Crypto Markets Structure, Stablecoin Bills Will Pass Within Trump's First 100 Days: Senator Scott
White House AI and Crypto Czar David Sacks held his first crypto-focused press conference on Tuesday, outlining legislative priorities and teasing the Trump Administration’s first major stabs at regulating the novel industry: a markets structure bill and a comprehensive stablecoin bill. At the event, which featured key leadership from the Senate and House, Senate Banking Committee Chairman Tim Scott (R-SC) said he intends for both key crypto bills to pass votes in the Senate by the end of Presi...
Another of the bill's most significant provisions is its focus on foreign-issued stablecoins.
Those provisions could align well with U.S.-based stablecoins, such as Circle’s USDC and Ripple’s RLUSD, which are domiciled in the U.S. and claim to already comply with many of the bill's requirements.
This could provide an edge over foreign-based issuers, such as Tether (USDT), the world’s largest stablecoin issuer by market cap, which some argue may struggle to adjust.
Tether, currently based in Bitcoin-friendly El Salvador, has no formal U.S. presence and has traditionally backed its USDT stablecoin with a mix of assets, including Bitcoin, U.S. Treasury bills, and corporate paper.
Much of Tether’s reserves, particularly its Bitcoin holdings, may not meet the new compliance standards, according to a recent report from JP Morgan.
Binance to Delist Tether and Other Stablecoins for EEA Users, Due to MiCA Regulations
Binance, the biggest centralized crypto exchange in the world, will delist nine stablecoins for those in the European Economic Area (EEA), including coins issued by Tether, as they are not compliant with the EU’s Markets in Crypto Assets (MiCA) regulations. Starting March 31, the assets affected will be USDT, FDUSD, TUSD, USDP, DAI, AEUR, UST, USTC and PAXG, the crypto exchange said in an announcment. Binance will continue to allow anyone to withdraw or deposit these coins but encourages EEA use...
That could lead Tether to liquidate portions of its Bitcoin reserves to comply with U.S. regulations, a move that could affect its ability to maintain its peg to the U.S. dollar, the report reads.
In a bid to allay those concerns, the company has appointed a new Chief Financial Officer to forge ahead with its plans for a full audit, a long point of contention from observers critical of how the company manages its operations.
It is hoped Simon McWilliams, a seasoned finance executive with over 20 years of experience, will add to Tether’s history of quarterly attestations through auditing firm BDO.
Still, it is not yet clear how swiftly issuers will adjust to the suggested changes, as many have depended on a largely unregulated market to foster adoption and develop their businesses into multi-billion dollar enterprises.
Edited by Sebastian Sinclair
