#GENIUSAct The term GENIUS Act refers to the Guiding and Establishing National Innovation in U.S. Stablecoins Act. This is a significant piece of bipartisan legislation introduced in the U.S. Senate, primarily by Senator Bill Hagerty (R-Tenn.), with co-sponsorship from Senators Tim Scott (R-S.C.), Kirsten Gillibrand (D-N.Y.), and Cynthia Lummis (R-Wyo.).
Purpose and Key Provisions
The GENIUS Act aims to establish the first comprehensive federal regulatory framework for stablecoins in the United States. Stablecoins are digital assets pegged to the value of real-world currencies, most commonly the U.S. dollar, and are used for various purposes like transferring money, making payments, and participating in decentralized finance (DeFi).
Key aspects and provisions of the GENIUS Act include:
* Regulatory Clarity: It seeks to define stablecoins and provide clear guidelines for their issuance and operation, addressing the current regulatory "gray zone" in the digital asset sector.
* Consumer Protection: The bill includes robust measures to protect consumers, such as:
* Reserve Requirements: Mandating that stablecoins be fully backed, typically on a one-to-one basis, by U.S. dollars, Treasury bills, or similar highly liquid assets. It also prohibits riskier reserve assets like corporate debt or equities.
* Transparency: Requiring transparency into the reserves backing stablecoins.
* Insolvency Protections: Prioritizing claims of stablecoin holders in the event of an issuer's bankruptcy and mandating expedited distribution of reserves.
* Misleading Marketing Prevention: Prohibiting representations that stablecoins are backed by the full faith and credit of the U.S. government, guaranteed by the government, or covered by FDIC insurance.
* Dual-Track Supervisory Regime: It proposes a system where larger stablecoin issuers (above $10 billion in liabilities) may opt for direct Federal Reserve oversight, while smaller startups can continue under state regulatory regimes.
* Anti-Money Laundering (AML) Compliance: The act extends Bank Secrecy Act (BSA) compliance requirements to stablecoin issuers, treating them as financial institutions for BSA purposes.
* Promoting U.S. Dollar Dominance: A core objective is to anchor the U.S. dollar deeper into the internet's economic layer, reinforcing its role as the world's reserve currency and creating new demand for U.S. Treasuries.
* Innovation and Competitiveness: By providing regulatory certainty, the GENIUS Act aims to foster innovation in fintech and digital payments, allowing U.S. companies to build and grow in the stablecoin space with fewer regulatory hurdles.
Current Status
As of May 2025, the GENIUS Act has seen significant progress. It has advanced through the U.S. Senate Banking Committee with bipartisan support and has recently cleared a key procedural vote in the Senate, paving the way for a full floor vote. Its passage is seen as a major step towards mainstreaming digital assets and solidifying the U.S.'s position in the evolving global financial landscape.