Senate to Vote on Republican-Led Genius Act Following Bipartisan Overhaul

Key Takeaways

•  The amended GENIUS Act is set for a Senate vote on March 13.
• The latest version introduces new transparency and enforcement requirements for stablecoin issuers.
• The bill, first introduced on Feb. 4, has bipartisan support.

The Republican-led Senate is set to vote on the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, a stablecoin bill establishing key regulatory requirements.

Introduced by Sen. Bill Hagerty on Feb. 4, the bill has gained support from Senate Banking Committee Chairman Tim Scott and Senators Kirsten Gillibrand and Cynthia Lummis.

The bill builds on a discussion draft Hagerty released in October 2024 and aims to clarify stablecoin regulation at both the state and federal levels.

Key Revisions: Balancing Federal and State Authority

Sen. Hagerty announced on March 10 that he had filed an amendment to the GENIUS Act, which will be voted on by the Senate Banking Committee on March 13.

The latest version of the bill proposes a clear division of stablecoin oversight . It grants states the authority to regulate stablecoin issuers with a market capitalization of up to $10 billion, while larger issuers may remain under state supervision if they meet specific regulatory requirements.

The bill also introduces new transparency and enforcement measures, including federal licensing and supervisory frameworks for stablecoin issuers. These provisions aim to address concerns over consumer protection, market stability, and financial security while allowing state regulators to maintain oversight of smaller issuers.

New Requirements for Stablecoin Issuers

The amended GENIUS Act mandates that stablecoin issuers adhere to stricter reporting and compliance requirements, including:

• Monthly Liquidity Reports: Issuers must disclose details on reserve composition and the total number of stablecoins in circulation.
• Reserve Composition Standards: Stablecoin reserves must be held in demand deposits, U.S. Treasury securities, U.S. dollars, or other approved assets.
• Transaction Freezing Compliance: Issuers must develop protocols to comply with orders to freeze transactions. The U.S. Treasury Secretary would have the power to block transactions involving stablecoins issued by foreign entities.
• AML and KYC Compliance: The bill designates stablecoin issuers as financial institutions for anti-money laundering (AML) purposes, requiring them to implement compliance programs and conduct due diligence on high-value transactions.

The latest draft expands upon earlier versions of the bill, which already included provisions for enhanced know-your-customer (KYC) and AML measures.

If approved by the Senate Banking Committee, the GENIUS Act would move to the full Senate for further debate, potentially setting the foundation for a federal stablecoin framework with significant state involvement.