GENIUS Act Vote Nears as Senate Weighs Stablecoin Regulations

Highlights:

• The Senate will vote on the bill after some modifications were made by Senator Bill Hagerty.
• The bill will require foreign issuers to comply with set rules, hence giving local issuers an advantage.
• The bill will set clear rules for the stablecoin market in the United States if it is approved.

The U.S. Senate Banking Committee is set to vote on the GENIUS Act this week. The bipartisan bill seeks to establish guidelines to regulate stablecoin issuers. The bill was originally introduced in February by Senator Bill Hagerty, who has since updated it after consulting with Republican and Democratic committee members. The revised legislation is co-sponsored by Senators Tim Scott, Cynthia Lummis, Kirsten Gillibrand, and Angela Alsobrooks.

🚨 Stablecoin regulation update! 🚨

The GENIUS Act is up for a vote in the Senate Banking Committee. If passed, it could bring much-needed clarity to the U.S. stablecoin market.

More oversight for big issuers, clear rules for all. Good or bad for crypto? 👇 #Stablecoins…

— CryptoNews24 (@info_cryptonews) March 11, 2025

The GENIUS Act focuses on multiple aspects of stablecoin regulation, including consumer protections, authorized issuers, risk mitigation, state pathways, insolvency, and transparency. Senator Gillibrand emphasized that the updated version improves on several key provisions.

According to the bill, stablecoin issuers would be regulated using different methods depending on their market capitalization. The Federal Reserve will monitor larger stablecoins with over $10bn in circulation, like Tether’s USDT and Circle’s USDC. However, smaller issuers will be monitored by state regulators.

The bill, if passed, will give clarity to stablecoins, which are becoming key to the digital assets market. A well-defined framework will aid transaction efficiency and help strengthen the US financial system. The legislation, according to Senator Hagerty, represents a secure, growth-oriented structure. The March 13 vote will decide whether to move the bill to the Senate floor for discussion and a possible vote on approval.

Stricter Regulations for Foreign Stablecoin Issuers

The new compliance requirements under the GENIUS Act for foreign stablecoin issuers give domestic companies a competitive advantage. The bill has been updated to include provisions requiring foreign issuers to meet higher reserve requirements, anti-money laundering measures, and liquidity requirements. The rules could be difficult for non-U.S. stablecoin providers to meet.

ICYMI some important updates to the new stablecoin bill, the “Genius Act”.

TLDR these updates give stablecoins like $RLUSD and $USDC an upper hand over foreign-issued stablecoins.

how? by holding foreign issuers to extra high standards including:

– strict reserve… pic.twitter.com/D5vWiJK5YC

— Dom (Bull/ish) | EasyA (@dom_kwok) March 11, 2025

According to crypto lawyer Jeremy Hogan, the reserve and compliance standards in the bill align with the issuers like Circle and Ripple Labs because their stablecoins already abide by many of the proposed rules in the GENIUS Act. In contrast, Tether’s USDT will face several hurdles because the company is based in El Salvador.

JP Morgan recently published a report indicating that the Bitcoin reserves and other holdings of Tether might fail to comply with the requirements of the GENIUS Act. The company might need to modify its reserve system, or it will face possible challenges in the United States. Tether recently hired Simon McWilliams to serve as its new Chief Financial Officer to lead financial report auditing efforts following concerns about transparency.

🚨 Tether May Need to Sell Bitcoin to Meet Proposed US Stablecoin Rules, Says JP Morgan.

🚨 Breaking News in the Crypto World 🚨

JP Morgan analysts are stirring up a storm by suggesting that Tether, the giant behind the USDT stablecoin, might need to sell its Bitcoin… pic.twitter.com/sS46LX79b6

— Bitfate (@bitfateprotocol) February 15, 2025

What Comes Next for the GENIUS Act?

The bill will pass through several stages before it becomes law. The act will move to the full Senate floor if the Senate Banking Committee approves it. The bill will then proceed to the House of Representatives for review if it successfully passes through the Senate. If the House does not modify it, the bill will proceed to the President, who can either approve it or veto the bill.

Industry stakeholders are keeping a close eye on the development of the bill because it is set to transform the stablecoin market. The new regulations might require issuers to adapt their compliance procedures and reserve policies.