- Senators reintroduced the updated GENIUS Act to regulate stablecoins with new compliance and reserve standards.
- The bill’s updates may impact foreign stablecoin issuers, giving an edge to U.S.-based stablecoins like USDC.
A bipartisan group of U.S. Senators has reintroduced the updated GENIUS Act, a bill designed to create a comprehensive regulatory framework for stablecoins in the United States. The revised version of the bill was initially introduced in February as reported by CNF. The bill seeks to address issues like reserve requirements, anti-money laundering (AML) standards, and international cooperation for stablecoins.
Senators Bill Hagerty (R-Tenn.), Tim Scott (R-SC), Kirsten Gillibrand (D-NY), and Cynthia Lummis (R-Wyo.) spearheaded the effort. Significant changes have been made to the legislation, which is now set for a crucial vote in the Senate Banking Committee on March 13.
Key Updates to the GENIUS Act
The updated GENIUS Act has several changes to strengthen stablecoin regulation, especially for foreign issuers. One of the big changes is the Reciprocity for Payment Stablecoins Issued in the Overseas Jurisdictions section. This section now has specific reserve requirements, liquidity, and sanctions compliance. This makes it harder for foreign stablecoin issuers to operate in the U.S. without adhering to these strict rules.
In addition to international provisions, the updated bill also has anti-money laundering (AML), counter-terrorism features, and risk management. These are to ensure that stablecoins interacting with the U.S. payment system comply with U.S. security measures to prevent fraud. The changes will provide more clarity and regulation for stablecoins in the U.S., which will affect companies like Tether (USDT) and Circle’s USD Coin (USDC), which dominate the market.
Pro-XRP Lawyer Weighs In
Jeremy Hogan, a lawyer who is a big supporter of XRP, shared his thoughts on the updated GENIUS Act. He said the new requirements, especially the reserve and compliance requirements, will make it hard for Tether to operate in the U.S. He also said the bill’s provisions on federal and state law interactions with foreign law will benefit stablecoins like Ripple USD (RLUSD) and USDC.
Hogan also noted that the bill requires issuers to have the technological capability to freeze or burn stablecoins if required by law. This raises questions on the technical feasibility of these requirements, especially for decentralized stablecoins. Hogan said this might create problems for issuers who want to be compliant while preserving the decentralized nature of their product.
The Vote and What Comes Next
The Senate Banking Committee will vote on the new GENIUS Act on March 13, 2025, to move it to a full Senate vote. If it passes, it will go to the House for more consideration and then to President Donald Trump to sign.
Senator Bill Hagerty one of the sponsors of the bill says creating a safe and pro-growth environment for stablecoin innovation is key. He believes this bill will make the US a leader in cryptocurrency regulation and improve the country’s financial infrastructure by integrating stablecoins with the traditional banking system.
The updated GENIUS Act is a big step toward addressing the growing importance of stablecoins in the financial sector. It’s about balance and innovation, a framework that will shape the future of digital currency in the US.
