Senator Bill Hagerty introduced the GENIUS Act today in the Senate. The legislation, officially known as the Guiding and Establishing National Innovation in US Stablecoins Act, focuses on regulating stablecoins, which is a top priority for ‘crypto president’ Donald Trump.
Hagerty’s bill defines stablecoins as “digital assets pegged to the US dollar” and claims to lay down strict rules for their “issuance, reserves, and oversight.”
Hagerty’s legislation directly addresses the lack of a federal framework, which he says has hindered stablecoins’ potential to drive demand for US Treasuries and boost financial innovation.
“Stablecoins can create new demand for US Treasuries and improve our payment systems,” Hagerty told reporters. The bill builds on a previous draft introduced in October and includes additional regulatory provisions aimed at bringing stability to the market.
The GENIUS Act splits issuers into two categories based on size. Those with more than $10 billion in circulating stablecoins will face federal oversight under the Federal Reserve. Smaller issuers—those with less than $10 billion—will continue operating under state regulations unless they voluntarily opt for federal supervision.
The legislation allows large issuers to apply for waivers to remain under state regulation but points to federal involvement as the default for major players. Hagerty’s bill designates the Federal Reserve to oversee stablecoin issuers that operate as banks.
Nonbank issuers fall under the supervision of the Office of the Comptroller of the Currency (OCC). The purpose of these distinctions is to avoid regulatory overlaps and assign clear oversight responsibilities, according to the legislation.
Under Hagerty’s proposal, all stablecoin issuers must secure licenses and maintain strong reserve backing for their digital assets. These reserves must be backed by tangible, liquid assets such as US Treasuries or cash to ensure that stablecoins remain stable.
Issuers must comply with reserve requirements designed to protect consumers and prevent defaults in the event of market fluctuations.
The GENIUS Act follows and strengthens the Clarity for Payment Stablecoins Act, previously introduced by Patrick McHenry, by offering stricter guidelines for major issuers while preserving room for smaller companies to grow.
Hagerty’s proposal is expected to push forward Trump’s larger crypto strategy, with analysts anticipating major implications for both the stablecoin market and even Wall Street.
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