Senator Bill Hagerty will introduce legislation Tuesday to create a comprehensive regulatory framework for stablecoins, marking the latest Republican push to establish crypto-friendly policies. According to a Bloomberg report, the bill proposes rules for stablecoin payments, requiring issuers to back tokens with US currency, Federal Reserve notes, Treasury bills, and other assets. The legislation, known as the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, requires stablecoin issuers to submit monthly audited reports on their reserves and imposes criminal penalties for providing false information.
This focus on transparency comes as the stablecoin market has surged to $205 billion, with Tether’s USDT token maintaining market dominance at a $140 billion market cap. Tether’s market position is notable given Cantor Fitzgerald’s stake in the company, led by incoming Commerce Secretary Howard Lutnick. This legislative push comes amid increasing scrutiny of Tether’s reserves and rising concerns about stablecoins’ capacity to withstand large-scale redemptions, underscoring the urgency for clear regulatory oversight.
Its closest competitor, USDC, holds a market cap of $54 billion, according to CoinGecko data, highlighting the significant scale and influence of these issuers in the financial ecosystem. “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,” Hagerty said. The bill has gained bipartisan support, with Senators Kirsten Gillibrand, Tim Scott, and Cynthia Lummis serving as co-sponsors.
Under the act, nonbank stablecoin issuers would be supervised by the Office of the Comptroller of the Currency, a Treasury Department bureau. The move follows President Donald Trump’s recent executive action promoting dollar-backed stablecoins while opposing central bank digital currency development. Trump’s administration has shifted from initial crypto skepticism to strong support, contrasting with former President Joe Biden’s enforcement-focused approach.
