The bill, named the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, outlines stringent requirements for stablecoin issuers, including mandatory reserve backing and routine financial disclosures.

The proposal comes amid ongoing concerns about the stability and transparency of stablecoins—cryptocurrencies pegged to the U.S. dollar or other assets. Under the legislation, issuers would be required to back stablecoins with U.S. currency, Federal Reserve notes, Treasury bills, or similarly liquid assets.

Additionally, the bill mandates that issuers submit monthly audited reports detailing their reserves, with criminal penalties imposed for any false reporting.

The introduction of this measure aligns with broader Republican efforts to foster innovation in the digital asset space, an area of increasing focus for President Donald Trump’s administration. By establishing regulatory guardrails, proponents argue, the bill could enhance the credibility of stablecoins and encourage their integration into mainstream finance.

David Sacks, Trump’s Crypto Czar, said today at a press conference that stablecoin legislation was the first priority for the new digital assets working group. Sacks said a “golden age” for crypto in America was here.

Senator Bill Hagerty Celebrating Stablecoin Bill on X. Source: Bill Hagerty on X

The GENIUS Act has garnered bipartisan backing, with Senators Kirsten Gillibrand, Tim Scott, and Cynthia Lummis co-sponsoring the bill.

The legislation seeks to balance federal and state oversight by granting regulatory authority to both the Federal Reserve and the Office of the Comptroller of the Currency (OCC). The Federal Reserve would oversee bank-issued stablecoins, while the OCC would regulate non bank issuers handling more than $10 billion in assets.

Smaller issuers would fall under the purview of state regulators, though some could seek federal waivers.

This division of oversight aims to address long standing tensions between federal and state regulatory approaches to cryptocurrency. The bill also reflects a shift in the Senate’s stance following the Republican takeover, which has prioritized a more crypto-friendly agenda.

Previous attempts to regulate stablecoins encountered resistance due to disagreements over regulatory jurisdiction, but with new leadership in place, lawmakers are optimistic about advancing the legislation.