- GENIUS Act sets licensing and reserve rules for U.S. stablecoin issuers.
- STABLE Act proposes a two-year pause on crypto-backed stablecoins.
- Dollar-backed stablecoins could expand U.S. influence in cross-border payments.
The U.S. Senate Banking Committee has submitted a stablecoin bill, the GENIUS Act, by an 18–6 vote. This development signals a change in how the U.S. may regulate dollar-backed digital assets. Alongside the STABLE Act and another proposal by Rep. Maxine Waters, lawmakers are moving toward a comprehensive conclusion. The suggested rules define stablecoins as payment-focused instruments backed by redeemable U.S. dollar reserves. These bills introduce new licensing, reserve, and transparency requirements for stablecoin issuers nationwide.
Dual Oversight Model for Stablecoin Issuers
The GENIUS Act outlines federal and state oversight for stablecoin entities. Issuers above a $10 billion market cap must concede with the Office of the Comptroller of the Currency (OCC) and Federal Reserve rules. Smaller issuers can operate under state-level supervision. The act categorizes stablecoin providers as financial institutions under the Gramm-Leach-Bliley Act, enforcing strict privacy and data protection standards.
In addition, the bill commissions that approved stablecoins hold reserves in liquid U.S. assets such as Treasury bills and insured deposits. These requirements apply to both bank and nonbank issuers operating within U.S. jurisdictions.
Restrictions on Collateral Types
A notable difference between the STABLE Act and GENIUS Act involves collateral backing. The STABLE Act introduces a two-year halt on issuing endogenously collateralized stablecoins. These tokens are backed solely by other cryptocurrencies unless they existed before the law’s enactment. This clause targets synthetic asset structures lacking real-world backing.
Meanwhile, the GENIUS Act avoids such a moratorium and focuses instead on reserve quality and user protection mechanisms during insolvency.
Boosting Dollar Use in Global Digital Payments
The proposed legislation could deepen reliance on dollar-backed stablecoins in international settlements. Under these laws, stablecoin issuers must convert reserves into dollar-denominated assets. This process could increase global demand for U.S. capital instruments and reinforce the dollar's presence in digital economies.
Additionally, enhanced interoperability standards may ease cross-border transactions for institutions and users. Stripe and Bank of America have explored stablecoin integration, signaling growing interest from traditional financial sectors.
Stablecoin regulation may drive expansion in supporting services such as digital wallets, custody platforms, and payment networks. Clear guidelines could also accelerate institutional involvement in stablecoin-based liquidity management. As usage expands, U.S. regulations may influence international frameworks, aligning more markets with dollar-denominated standards.
The House Financial Services Committee on Wednesday is expected to vote on its version of the legislation. If signed into law, it would effectively exempt Tether and other stablecoins issued overseas from U.S. oversight for at least two years. A related Senate bill, which passed the Senate Banking Committee last month, would permanently carve out Tether and other foreign-based stablecoins from U.S. regulation.
