Senator Bill Hagerty, along with co-sponsors Senators Tim Scott, Cynthia Lummis, and Kirsten Gillibrand, have presented the updated version of the GENIUS Act, a crucial initiative to establish a legal framework for stablecoins in the United States. This bill, first introduced in February this year, has been amended to incorporate feedback from various industry stakeholders, thereby refining the regulations and promoting a crypto-asset management environment in the country.
Bill Hagerty emphasized the immense potential of stablecoins in driving financial innovation, particularly in improving transaction efficiency and increasing demand for the U.S. Treasury. He shared:
"My bill creates a safe regulatory framework that encourages growth, thereby driving innovation and supporting the President's mission to make America the world's Bit capital."
One of the notable points in this amendment is the expansion of the section "establishing reciprocal arrangements between the United States and other countries regarding payment stablecoins issued in other countries." The initial version of the bill only addressed the issuance of cross-border stablecoins, while the updated version has expanded the specific requirements for stablecoins issued in other countries.
Accordingly, the bill requires the U.S. Treasury Secretary to establish bilateral agreements with countries with similar regulatory frameworks. These agreements will include requirements for reserves, supervision, anti-money laundering, sanctions compliance, and liquidity standards. These provisions aim to enhance interoperability and improve international transactions with U.S. dollar-pegged stablecoins. The bill also sets a two-year deadline to complete these agreements.
Another important addition is the expansion of the definition of "Federally Supervised Entity" to include eligible non-bank stablecoin payment issuers, along with any organization authorized by the Comptroller. This expansion helps to increase transparency and protect consumer interests in the stablecoin ecosystem.
The updated version of the act also introduces new regulations related to transaction blocking and compliance with legal orders. The Treasury Secretary will have to work with issuers before blocking transactions related to the assets of foreign individuals or organizations. However, the Secretary does not need to provide prior notice to issuers when taking action. Issuers must also ensure they have the technology and infrastructure to comply with legal requirements, including the ability to freeze, seize, or stop transactions if requested by authorities.
Additionally, the bill prohibits issuers from providing or trading stablecoins from other countries in the U.S. unless they meet the legal requirements of the GENIUS Act.
Senator Kirsten Gillibrand had positive comments on the improvements in the updated version of the GENIUS Act: "This updated version has significantly improved many critical provisions, including consumer protections, regulations on authorized stablecoin issuers, risk mitigation, state-level pathways, bankruptcy status, and transparency." These improvements not only help strengthen the stability of the financial system but also create a clear and fair legal environment for all participants.
The introduction of the updated GENIUS Act comes as the U.S. is pushing for stronger regulation of cryptocurrencies, particularly stablecoin products. This bill is part of the government's comprehensive strategy to build a robust legal framework for digital assets, helping the U.S. maintain its leading position in the global crypto industry.
On March 13, 2025, the Senate Banking, Housing, and Urban Affairs Committee will hold an oversight hearing to discuss and review the GENIUS Act. This is an opportunity for stakeholders to provide input and make necessary adjustments before the bill officially takes effect.
Disclaimer: This article is for informational purposes only and not investment advice. Investors should do their own research before making decisions. We are not responsible for your investment decisions.
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