On March 13, 2025, the Senate Banking Committee approved, by a vote of 18 to 6, the “Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025” also named the “GENIUS Act of 2025.” The GENIUS Act was introduced by Senator Bill Hagerty (R-Tenn.) and is co-sponsored by the Chairman of the Senate Banking Committee Tim Scott (R-S.C.) and Senators Kirsten Gillibrand (D-N.Y.), Cynthia Lummis (R-Wyo.) and Angela Alsobrooks (D-Md.). The legislation would establish a regulatory framework for “payment stablecoins” issued in the United States. Under this framework, stablecoins could be issued by a “permitted payment stablecoin issuer” (a “PPSI”), which could be (i) a subsidiary of an insured depository institution, (ii) an uninsured depository institution or (iii) a nonbank entity. Regulation and supervision of PPSIs could occur, depending on the type of PPSI and the amount of stablecoins it has issued, at either the federal or state level (or both). The GENIUS Act also imposes a number of requirements applicable to all PPSIs.
The GENIUS Act represents the first digital asset-related legislation approved by a congressional committee in the new Congress. The legislation will now move to the full Senate for consideration. Members of the House of Representatives have also released proposed stablecoin legislation that would, like the GENIUS Act, create a regulatory framework for these instruments. The Trump Administration has supported these legislative efforts, with White House “Crypto and Artificial Intelligence Czar” David Sacks describing both stablecoin legislation and separate legislation expected to be introduced regarding “market structure” for digital assets as Administration priorities.