Senator Hagerty Refreshes GENIUS Act: A New Vision for U.S. Crypto Regulation

Senator Bill Hagerty, alongside Senators Tim Scott, Cynthia Lummis, and Kirsten Gillibrand, has unveiled a revised version of the GENIUS Act, focusing on stablecoin regulation.

Initially put forth in February, this updated bipartisan legislation reflects input gathered from diverse stakeholders in the cryptocurrency sector. It introduces critical adjustments aimed at enhancing the regulatory landscape for stablecoins within the United States.

Key Updates to the GENIUS Act

Senator Hagerty emphasized the transformative potential of robust stablecoin innovation, highlighting benefits such as increased transaction efficiency and heightened demand for U.S. Treasuries.

“This legislation establishes a safe and growth-oriented regulatory environment that will spur innovation and advance the President’s goal of making America the leading global hub for cryptocurrency,” he stated.

A significant enhancement in the revised act is the section titled “Reciprocity for Payment Stablecoins Issued in Overseas Jurisdictions.” The earlier amendment covered the issuance of stablecoins across borders, but the new version broadens this scope, introducing explicit requirements for stablecoins issued abroad.

This entails that the Secretary of the Treasury must forge reciprocal agreements with nations that have similar regulatory structures, encompassing reserve obligations, oversight, anti-money laundering measures, sanctions compliance, and liquidity standards. These agreements are anticipated to bolster international transactions and interoperability involving U.S. dollar-pegged stablecoins, with a two-year timeline set for their completion.

The revised GENIUS Act also enlarges the definition of a “Comptroller-regulated entity” to encompass both federally qualified nonbank payment stablecoin issuers and any entities authorized by the Comptroller.

Additionally, the new rules for issuers stipulate protocols regarding transaction blocking and adherence to legal directives. The Secretary of the Treasury is required to coordinate with issuers before halting transactions linked to foreign individuals; however, prior notification to issuers is not mandated.

Moreover, issuers are tasked with implementing necessary technology to comply with legal orders, ensuring they can freeze, seize, or halt stablecoin transfers when legally required. Offering or trading foreign stablecoins in the U.S. will only be permissible if they align with the stipulations of the Act.

“The revised GENIUS Act significantly enhances important aspects concerning consumer protection, authorized stablecoin issuers, risk management, state pathways, insolvency, transparency, and more,” Senator Gillibrand noted.

The reintroduction of the GENIUS Act arrives amid a wider initiative to establish clearer cryptocurrency regulations in the U.S. A Senate Committee on Banking, Housing, and Urban Affairs executive session is scheduled for March 13, 2025, at 10:00 a.m. ET, to discuss the bill.