Washington, D.C. – June 11, 2025 — A major step toward stablecoin regulation in the United States arrived this week with the release of a significantly strengthened version of the GENIUS Act, now led by Senator Bill Hagerty (R‑TN). The revised bill targets gaps in consumer protection, anti-money laundering enforcement, and national security—bringing fresh urgency to stablecoin oversight even as industry leaders launch parallel frameworks.
Stablecoins—digital tokens pegged to assets like the U.S. dollar—have rapidly become integral to crypto markets and emerging payment systems. With over $232 billion in circulation and strong demand for faster, cheaper global transactions, lawmakers are racing to place stablecoins within a consistent, federal regulatory framework.
Until now, U.S. regulation was fragmented: issuers faced overlapping federal and state scrutiny, and gaps in enforcement allowed misuse for laundering, evading sanctions, or funding illicit activity. Meanwhile, rival laws like the STABLE Act in the House and Europe’s MiCA in the EU are progressing—prompting U.S. lawmakers to act.
The latest revision of the GENIUS Act, introduced May 29, reflects months of bipartisan negotiation. While the original version focused narrowly on stablecoin issuance, the current draft adds a swathe of measures to guard consumers, transparency, and national interest:
- No yield-generating stablecoins: New Section 2 prohibits paying interest or “yield” on stablecoin holdings—a move aimed at avoiding shadow banking and de-risking retail exposure.
- Brighter transparency and accountability: Issuers must back coins 1:1 with U.S. dollars, short-term Treasuries, or equally liquid assets; file monthly reserve disclosures; and submit to annual third-party audits for issuers over a certain size.
- Tougher marketing rules: Marketing language must avoid misleading terms like “legal tender” or government affiliation.
- Stronger anti-money laundering provisions: Issuers must comply with Bank Secrecy Act standards, implement sanctions checks, monitor transactions, file suspicious-activity reports, and implement freeze/burn capabilities.
- Foreign stablecoins restricted: Issuance or offer of non-U.S. compliant stablecoins—such as those from Tether or foreign entities—is effectively barred, unless fully accountable under U.S. rules .
- Enforcement mechanisms: Regulators gain enforcement authority to penalize, suspend, or revoke non-compliant issuers—and consumers are granted priority in insolvency proceedings.
- Regulator clarity: The Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) are clarified; stablecoins will not be considered securities or commodities, while oversight is assigned to federal or state banking authorities.
- International compatibility: The Federal Reserve and Treasury can negotiate bilateral frameworks with foreign regulators to facilitate internationally interoperable stablecoins.
Together, these updates reflect a push by Senators Tim Scott (R‑SC), Kirsten Gillibrand (D‑NY), Cynthia Lummis (R‑WY), and Angela Alsobrooks (D‑MD) to tailor the bill to genuine public interest, security, and financial integrity.
On June 11, Senator Hagerty urged colleagues to support the GENIUS Act as a foundational step to bring clear regulatory structure for stablecoins, calling it “a win for working families, small businesses, and everyday Americans” by improving cross-border payments and reducing costs.
His appeal found resonance on the Senate floor. A procedural vote to overcome a potential filibuster passed, signaling strong momentum for full debate.
Industry reaction has been mixed:
- Supporters, including Galaxy Digital’s Mike Novogratz and Chainalysis, applaud the clarity and compliance focus, suggesting it may encourage U.S. stablecoin issuance and improve market trust.
- Critics—prominent among them Sen. Elizabeth Warren—argue that the latest draft hasn’t gone far enough on money-laundering safeguards or conflict-of-interest protections connected to Trump-era crypto holdings. Warren warned the bill “is riddled with loopholes” and criticized its failure to block participation from powerful political actors .
The GENIUS Act is one thread in a broader legislative push:
- The CLARITY Act, focused on broader crypto‑market structure, has gained House traction—even as some Democrats urge improved SEC‑CFTC coordination.
- In parallel, the House’s STABLE Act proposes similar measures, and its eventual reconciliation with Senator Hagerty’s version will shape the final bill.
Both branches are racing to deliver stability before the 2026 elections, with stablecoins no longer seen as fringe tech—but as core infrastructure for the next-gen financial system.
With Senate Banking Committee approval already secured in March, the revised bill is now poised for full floor debate. Final House passage and Trump’s signature could follow—assuming bipartisan consensus is priced in .
If enacted, the GENIUS Act would:
- Launch a comprehensive federal regime for stablecoins.
- Incentivize issuance by U.S.-regulated entities.
- Close key loopholes on consumer safety, marketing, and illicit finance.
- Ensure the U.S. retains dominance in digital payments.
But challenges remain: balancing innovation with oversight, calibrating yield bans, aligning state and federal rules—and navigating political sensitivities, especially around Trump-era crypto ventures.
The GENIUS Act signals a turning point: the era of regulatory ambiguity for stablecoins in the U.S. is ending. With clear definitions, robust transparency, and accountability baked in, the bill sets a new standard—and stakes a claim for American leadership in the evolving world of digital finance.
As the legislative process moves forward, all eyes remain on Capitol Hill—but also on the innovators, investors, and regulators whose cooperation will determine whether the U.S. can turn promise into reality.