Senate Banking Committee Passes Senator Hagerty’s GENIUS Stablecoin Bill

The Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) has passed the Senate Banking Committee with a bipartisan 18-6 vote.

Sponsored by Senator Bill Hagerty (R-Tenn.), the bill aims to create a comprehensive regulatory framework for stablecoins .

“As the world modernizes its payment systems, the U.S. cannot be left behind,” Hagerty said. “Stablecoins can play a pivotal role in spurring that modernization. Whether it’s improving transaction efficiency, freeing up working capital, or driving U.S. Treasury demand, the benefits of a clear regulatory framework for stablecoins are immense.”

Introduced on February 4, 2025, the GENIUS Act introduces licensing and oversight measures for stablecoin issuers at both the federal and state levels. It grants state-level oversight for issuers with a market capitalization under $10 billion, while larger issuers will fall under the supervision of the Federal Reserve and the Office of the Comptroller of the Currency (OCC).

The new standards require issuers to maintain transparency in their operations by publishing monthly liquidity reports that outline the composition of their reserves. Stablecoins must be fully backed 1:1 by reserves held in US dollars or other highly liquid assets.

To protect consumers, issuers are required to promptly fulfill and the Federal Reserve and OCC have the authority to suspend licenses or impose penalties on issuers that fail to meet these obligations.

The act also addresses anti-money laundering (AML) and know-your-customer (KYC) compliance by forcing issuers to adhere to established AML and KYC standards.

The bill still requires at least 60 votes to advance in the Senate, making bipartisan cooperation essential.

Senator Elizabeth Warren highlighted Democrat concerns with the bill, stating that it marks "a clear threat to our national security" in its current form.

“It would be crazy to advance this bill when it’s got so many holes in it that have been pointed out, and to advance it at the exact moment that news is breaking about Donald Trump trying to create his own stablecoin with an outfit that is notorious for breaking the law,” Warren said.

“Jamming this through while Donald Trump is out there making a deal with a criminal stablecoin platform makes no sense. We will regret this,” referring to reports of Trump's World Liberty Financial being in talks with Binance.

Another Democrat, Catherine Cortez Masto of Nevada, said the bill is a "great start but [it] is not ready for prime time."