Latest Senate stablecoin bill addresses foreign issuers, national security safeguards
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Sen. Bill Hagerty (R.-Tenn.) speaks at Bitcoin 2025 this week. Photo: Bridget Bennett/Bloomberg/Getty
Since it passed out of the Banking Committee in March, Sen. Bill Hagerty's legislation on issuing stablecoins now specifically has language addressing conflicts of interest and national security protections.
Why it matters: Stablecoin legislation in the Senate has addressed many of the Senate Democrats' most pressing concerns, but still carries one notable exception.
The big picture: The revised version of the GENIUS Act does more to constrain stablecoin issuers to protect consumers, undermine criminal activity and secure the banking system.
- "GENIUS now in its current form is more prescriptive. Just in terms of specific requirements," James Rathmell, general counsel of Haun Ventures, tells Axios.
Catch up quick: The original legislation that cleared banking in March (S. 394) was a slimmer bill, one that primarily dealt with issuance.
- The majority leader exercised a special rule to let Hagerty bring a new version to the floor, S. 1582. The Senate agreed to a motion to proceed on the bill, by a vote of 69-31.
Zoom in: The details of this legislation have been shifting fast, but these are changes we can see from the published draft:
- One large issue has been foreign issued stablecoins, such as the world's largest, tether.
- In order for their stablecoins to trade among U.S. users, under the latest version, foreign stablecoin issuers will have their nation's regulatory regime assessed by the Treasury and other banking regulators for comparability with the U.S.
- In particular, they will need to have the technological capacity to comply with law enforcement requests, such as seizing and freezing criminal assets (the big stablecoins can do this now), as described in a more detailed anti-money laundering section than that found in the prior version.
Between the lines: The teeth in the new version of GENIUS comes in how it deals with non-compliant stablecoins.
- After three years, no U.S.-based cryptocurrency distributors can touch non-compliant stablecoins, and significant penalties for knowing non-compliance are detailed in the current version.
In addition, the new version has other language, including preventing stablecoins from offering yield (Sec. 2), requiring audits, preventing misleading marketing and slightly expanding the list of reserve assets (all in Sec. 4).
Yes, but: The elephant in the room is President Trump's family crypto ventures, which have been a stumbling block for pro-crypto members of Congress.
- The revised GENIUS act introduced new language reiterating existing ethics rules that would prevent federal elected officials from issuing stablecoins, but those rules are generally understood to exempt the president — and enforcement has always been the key issue anyway.
What's next: GENIUS is expected to be subject to an open amendment process.
What we're watching: There's a third bill in the works, over in the House: STABLE, from Reps. French Hill (R-Ark.) and Bryan Steil (R.-Wisc.).
- "My expectation is that everyone is eager to reconcile the two bills," James Rathmell said.
