U.S. Senators Push New Stablecoin Bill with State and Federal Oversight

The latest draft of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act introduces a major shift in stablecoin regulation, aiming to balance oversight between state and federal authorities. The bill, backed by Senators Bill Hagerty (R-TN), Tim Scott (R-SC), Kirsten Gillibrand (D-NY), Cynthia Lummis (R-WY), and Angela Alsobrooks (D-MD), was initially proposed in February and has now been updated before a key Senate Banking Committee hearing.

A key change is expanding state oversight of stablecoin issuers with market caps of up to $10 billion, granting them greater regulatory power. The bill also introduces a waiver system, allowing certain issuers to remain under state supervision if they meet strict financial and compliance requirements.

Transparency is another focal point, requiring issuers to publish monthly liquidity reports detailing reserve compositions, including cash, U.S. Treasuries, and approved assets. Additionally, issuers must implement transaction-freezing mechanisms and comply with Treasury orders to block foreign-controlled stablecoins.

Enhanced anti-money laundering (AML) and know your customer (KYC) provisions are also included. Stablecoin issuers are explicitly classified as financial institutions for AML purposes, requiring compliance programs and due diligence on high-value transactions.

The GENIUS Act now awaits potential amendments by the Senate Banking Committee before advancing to the full Senate for debate and a final vote. If passed, it could significantly reshape the regulatory landscape for stablecoins in the U.S.