Senator Bill Hagerty pushes for stablecoin regulatory framework

Senator Bill Hagerty intends to present authorities connected Feb. 4 to found a regulatory model for stablecoins, Bloomberg News reported.

The measure — dubbed the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act — volition outline provisions for issuing stablecoin payments and mandate that they beryllium backed by US currency, Federal Reserve notes, Treasury bills, oregon different assets.

The measure volition besides necessitate stablecoin issuers to taxable monthly audited reports connected their reserves. False reporting would effect successful transgression penalties. 

Regulators person scrutinized the prime of assets backing stablecoins, including Tether’s USDT token, amid concerns implicit liquidity and the quality to conscionable wide redemption requests nether marketplace stress.

As a result, the measure seeks to supply regulatory clarity for stablecoins, which are tokens pegged to the US dollar and different real-world assets. Proponents reason that national oversight would heighten credibility and beforehand broader adoption of stablecoins wrong the fiscal system.

Hagerty said:

“My authorities establishes a harmless and pro-growth regulatory model that volition unleash innovation and beforehand the President’s ngo to marque America the satellite superior of crypto.”

Senators Kirsten Gillibrand, Tim Scott, and Cynthia Lummis are co-sponsoring the bill. The inaugural represents a continued effort among Republican lawmakers to make guidelines for the crypto industry, a assemblage President Donald Trump has prioritized.

The Office of the Comptroller of the Currency, an autarkic bureau wrong the Treasury Department, would modulate and supervise nonbank stablecoin issuers.

Propelling stablecoin growth

Trump has committed to fostering the crypto manufacture by reducing regulatory barriers and appointing crypto-friendly regulators. 

On his archetypal week successful office, he signed an enforcement order to make a crypto moving group, halt developments regarding a US cardinal slope integer currency, and measure and perchance found a integer plus stockpile.

However, portion the bid established a moving radical to suggest a regulatory model for integer assets, immoderate substantive argumentation changes would necessitate legislature approval. Both large parties person signaled an involvement successful addressing stablecoin regulation.

Notably, the ineligible model could spur maturation successful the stagnated US stablecoin market. According to Chainalysis’ “2024 Geography of Crypto Report,” stablecoin measurement is shifting distant from US platforms, apt owed to barriers imposed by sputtering regulatory advancement connected stablecoins and integer assets.

In 2023, the stablecoin flows to US crypto exchanges reached astir 50%, falling beneath 40% successful June 2024. The study suggested that planetary stablecoin adoption is outpacing US dollar usage.

Based connected CryptoSlate data, the stablecoin marketplace surpassed $215 cardinal successful size and implicit $34 trillion successful yearly aggregated transportation measurement arsenic of Feb. 3.

The station Senator Bill Hagerty pushes for stablecoin regulatory framework appeared archetypal connected CryptoSlate.