The U.S. senator Bill Hagerty puts forward a new stablecoin regulation: USDT and USDC under the control of the FED

1 month ago 19

Yesterday, Republican Senator Bill Hagerty presented a new bill in the United States Senate regarding stablecoin regulation.

The document, titled “Guiding and Establishing National Innovation in United States Stablecoins” (GENIUS ACT), aims to create a clear and transparent regulatory framework for stablecoin issuers in the country.

According to several political figures, this new legislation could help strengthen the dominance of the US dollar as a global reserve currency.

Let’s see everything in detail below.

Senator Bill Hagerty presents the “Genius Act”: a new stablecoin regulation that strengthens the US dollar

Yesterday, Senator Bill Hagerty proposed to the Senate the so-called “GENIUS ACT”, a regulation aimed at defining the stablecoin crypto sector.

The proposed bill is part of a broader initiative among legislators to establish clear guidelines for the digital asset market.

Everything seems to be in line with the politics declared by the new President Trump, who wants to promote a regulatory environment favorable to the crypto sector.

This new stablecoin reform, as highlighted by Hagerty himself, has the full potential to enhance technological innovation in the country.

In particular, it is estimated that the GENIUS ACT could improve transaction efficiency and stimulate the demand for US Treasury securities, contributing to consolidate the global leadership of the US dollar.

It is worth highlighting how the political proposal has received bipartisan support, having been co-sponsored by senators Kirsten Gillibrand, Tim Scott, and Cynthia Lummis.

Now the ball will pass to the Senate Banking Committee or the Senate Finance Committee, which will have to express their opinion on the matter.

In case of approval, the bill will move to the vote of the Chambers, and may eventually end up on the President’s desk, who will have to decide whether or not to apply the Veto.

In a recent post on social media, Senator Lummis emphasized that 2025 could be a crucial year not only for stablecoins but for the entire digital asset sector.

Lummis herself in April 2024 had presented her own reform on stable currencies “Payment Stablecoin Act“, not yet passed into law.

In the meantime, Fox Business journalist Eleanor Terrett reported that the bill is expected to advance quickly, given the shared political support.

As written by Terrett on X:

“The members of the Senate staff told me that they expect the bill to be quickly approved by the Congressional committees.”

What the new regulation entails: USDT and USDC under the supervision of the FED

According to the definition set by the GENIUS ACT regulation, stablecoins will be defined and framed as digital assets pegged to the US dollar.

This first definition highlights the role of the US fiat currency, which acts as a central element for the issuance and management of virtual currencies.

The regulatory framework establishes that all stablecoin operators must have their reserves backed by dollar reserves or by U.S. Treasury Securities.

In particular, license and reserve requirements are established for issuers, with two types of monetary supervision distinct.

On one hand, all those companies that present stablecoin with a capitalization exceeding 10 billion dollars, such as Tether (USDT) and Circle (USDC), will be subject to the control of the FED.

All those smaller ones will instead be subject to the review of state bodies, with the possibility that different principles may be adopted based on the region.

This is a point in favor of the large stablecoin companies, which will be objectively protected by the American central bank, without any distinction or discrimination.

It is important to highlight how the GENIUS ACT requires issuers to present audited monthly reports on their reserves, with penalties for false statements.

Senator Hagerty, live on Bloomberg Television, reiterated how the regulatory framework presented could enhance the technological growth of the country, promoting President Trump‘s mission to make America the world capital of crypto.

Trump’s policy includes directives aimed at reducing regulatory burdens for cryptocurrency companies, in line with the intent of the GENIUS Act to provide a structured regulatory environment that fosters innovation in stablecoins.

In addition to the general consensus, there are also opponents to the reform, such as the deputy Maxine Waters who has expressed her concerns about the potential effects.

In detail, what scares Waters is the possibility that thanks to this regulation, commercial companies could issue their own stablecoin, creating complications and disruptions for the market.

Stablecoin market still growing: total supply at 220 billion dollars

While the United States is grappling with the regulation of the digital asset sector, the stablecoin market continues to run wild.

According to the data from DefiLlama, the total supply of stablecoins (which coincides with the market capitalization) has reached the record of 220.8 billion dollars.

We are talking about a value exceeding 90 billion dollars compared to what could be observed just over a year ago in January 2024.

From the beginning of 2025, however, the loot is increasing by 17 billion dollars, a figure that demonstrates the strong growth phase of this niche sector.

Consider that just yesterday, Tether Treasury injected 1 billion USDT into the market, while Circle minted 250 million USDC.

Tether, the company of Paolo Ardoino, still maintains its role as a leader in the stablecoin industry, boasting a dominance of 63.96% and over 140 billion in capitalization.

Circle follows in second place with a smaller market cap of 55 billion dollars, while still boasting a greater presence in the MiCA-EU territory.

Following the first two seeds, we find much smaller stablecoins with valuations that do not exceed 10 billion, which were discussed in the GENIUS ACT regulation.

In this regard, Ethena USD, DAI, Sky Dollari, First Digital USD, Usual USDD and others will be subject to state control in the United States.

Some of them might have compliance issues due to the lack of reserves denominated in US dollars, such as USDe which is also backed by Bitcoin.