Since it passed out of the Banking Committee in March, Sen. Bill Hagerty's legislation on issuing stablecoins now has language on 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 noteworthy exception.

The big picture: The revised version of the GENIUS Act does more to constrain stablecoin issuers in order 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 fast: 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 Senate 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.
• For their stablecoins to trade among U.S. users, under the latest version, foreign stablecoin issuers will be required to 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.) This is described in a more detailed anti-money-laundering section than what was 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 language preventing stablecoins from offering yield (Section 2), requiring audits, preventing misleading marketing and slightly expanding the list of reserve assets (all in Section 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 introduces language reiterating 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 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," Rathmell said.

The Department of Labor has rescinded guidance that discouraged retirement plans from offering cryptocurrencies in member portfolios.

• Why it matters: It rolls back another guidance from the Biden era, following, for example, banking regulators walking back guidances that discouraged banks from engaging in digital-asset business.

What they're saying: "Today's release restores the Department's historical approach by neither endorsing, nor disapproving of, plan fiduciaries who conclude that the inclusion of cryptocurrency in a plan's investment menu is appropriate," the update explains.

Catch up fast: The department issued guidance back in 2022 saying fiduciaries must exercise "extreme care" when offering such assets.

• Notably, Fidelity announced shortly after that it would offer bitcoin in 401(k) plans anyway. Fidelity then offered a critique of the guidance.

While everyone else in the stablecoin industry has their eyes on big banks and hedge funds, the issuer of the world's largest stablecoin, tether, is watching a much older business: commodities.

Why it matters: Stablecoins are the biggest story in crypto policy now — and may be the biggest story in finance before long.

Driving the news: In a move that may seem unexpected for a company known as a liquidity instrument for trading bitcoin and its progeny, Tether recently acquired a 70% stake in Adecoagro, an agriculture and energy company operating in Latin America.

• Adecoagro has been in business for more than 20 years and generated around $1.5 billion in revenue last year from farming food crops and producing renewable energy from sugarcane.
• It calls itself one of the largest owners of productive farmland in South America.

The big picture: "The biggest reason in the next five years of growth for USDT will be commodity trading," Tether CEO Paolo Ardoino says.

• "In my opinion, commodity trading and all the international deals for commodity trading...will run on stablecoins," he says. Commodity traders tell them about the pain of using traditional finance.
• In November, Tether announced that USDT was used in financing a trade of crude oil worth $45 million.
• The advantage of this, Ardoino explains, is that ships won't start loading oil until the wire clears. That can take days with payments as we know them, but USDT settles nearly instantly.

State of play: Tether started talking about trade finance late last year, but having an actual commodities business gives it new leverage.

What's next: With Tether now steering it, Adecoagro will be looking to use stablecoins more as it sells rice, bioethanol and other agriculture products.

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