New US Stablecoin Bill Splits Authority Between State and Federal Authorities
Date: 2025-03-11 Author: Oliver Abernathy Categories: IN WORLD
The updated GENIUS Act introduced in March 2025 would significantly change the approach to regulating stablecoins in the US. The new bill would split control between state and federal authorities, and would introduce transparency requirements and new enforcement methods for issuers.
According to the updated version of the document, states would be able to regulate stablecoin issuers with a market cap of up to $10 billion in cooperation with federal authorities. This would give states more authority to regulate a significant portion of the stablecoin market. Importantly, larger issuers will be able to remain under state regulation if they meet certain requirements, such as having stable capital and a good reputation.
In addition, the new bill introduces a process for obtaining an exemption for large issuers, allowing them to remain under state regulation only if they meet specific criteria. To do so, issuers must demonstrate sufficient capital, a good operating history, and be overseen by an experienced state regulator.
The document also significantly strengthens transparency requirements. Issuers are now required to publish monthly liquidity reports, disclosing the composition of their reserves, including the number of stablecoins issued. The new requirements specify that reserves must include only U.S. currency, demand deposits, Treasury bonds, and other “approved assets.”
In addition, issuers are required to create mechanisms to comply with freeze orders. The Treasury Department is given the authority to block and prohibit transactions involving stablecoins issued by foreign individuals or entities.
Previously discussed provisions in the draft to improve know-your-customer (KYC) and anti-money laundering (AML) are significantly strengthened in the new version of the law. Stablecoin issuers are now officially classified as financial institutions, which obligates them to establish compliance programs and conduct due diligence for high-value transactions.
The bill is currently awaiting amendments from the Senate Banking Committee before heading to the Senate for debate and a final vote.
