U.S. Senate Committee on Banking, Housing and Urban Affairs members introduce GENIUS Act to set licensing and reserve rules for payment stablecoins

The U.S. Senate Committee on Banking, Housing and Urban Affairs published a majority press release announcing the introduction of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, a bipartisan bill intended to establish a regulatory framework for dollar-denominated payment stablecoins. The GENIUS Act would define a payment stablecoin as a digital asset used for payment or settlement that is pegged to a fixed monetary value, set procedures for licensing institutions to issue stablecoins, and impose reserve requirements and tailored regulatory standards. For issuers of more than USD 10 billion of stablecoins, it would apply the Federal Reserve’s regulatory framework to depository institutions and the Office of the Comptroller of the Currency’s framework for nonbank issuers; issuers under USD 10 billion in market capitalization could remain under state regulation, with a waiver process for firms exceeding the threshold to remain state-regulated. The release also highlights consumer protection features including one-to-one reserves, a prohibition on algorithmic stablecoins, and compliance with U.S. anti-money-laundering and sanctions requirements. Sponsors indicated they intend to work with House Financial Services Committee leadership to advance the legislation toward enactment.