Senator Bill Hagerty Proposes Bill to Regulate US Stablecoin Market

Senator Bill Hagerty is poised to introduce a new piece of legislation aimed at providing regulatory clarity for the burgeoning stablecoin market in the United States. Known as the GENIUS Act, which stands for Guiding and Establishing National Innovation for US Stablecoins, this bill seeks to establish a structured regulatory environment for digital currencies that maintain a stable value, such as Tether and USD Coin, which currently dominate the market share.

Hagerty announced his intentions through a post on X, with Bloomberg also covering the development earlier in the day. He emphasized that the introduction of the GENIUS Act, co-sponsored by Senators Tim Scott, Kirsten Gillibrand, and Cynthia Lummis, marks a significant step towards defining a clear regulatory framework for stablecoins. This initiative follows Hagerty's earlier draft legislation from October 2024, reflecting a continuous effort to align with similar regulatory proposals seen in the House of Representatives.

The push for stablecoin regulation comes at a time when the crypto industry is gaining traction, supported by prominent figures like Senator Cynthia Lummis, who recently took the helm of the Senate Banking Subcommittee on Digital Assets. Lummis has been a vocal advocate for cryptocurrency, notably pushing for a strategic Bitcoin reserve in the U.S. This aligns with actions taken by President Trump, who signed an executive order to establish a U.S. strategic digital assets stockpile and form a crypto working group focused on regulatory clarity.

Under the GENIUS Act, stablecoins must be backed by secure and tangible assets like U.S. Treasury bills, U.S. dollars, and Federal Reserve notes. This requirement aims to ensure stability and trust in these digital currencies. Additionally, issuers of stablecoins would need to conduct and publicly share monthly audit reports, promoting transparency and accountability within the sector.

Hagerty has expressed his commitment to collaborating with Rep. French Hill, the current chair of the U.S. House Financial Services Committee, to ensure the bill reaches President Trump's desk, potentially setting the stage for the U.S. to become a leading hub for cryptocurrency innovation. This legislative effort underscores the growing recognition of stablecoins' role in modern finance, striving to balance innovation with regulatory oversight to protect consumers and foster a robust digital economy.