A Republican senator is backing legislation to create a framework for stablecoins.
The bill floated by Tennessee’s Bill Hagerty is designed to create a predictable regulatory environment for stablecoins, a form of cryptocurrency pegged to the stable assets such as the U.S. dollar, Bloomberg News reported Tuesday (Feb. 4).
The effort comes as President Donald Trump looks to turn America into the crypto capital of the world, and marks the latest effort by Republicans to create guidelines for the industry.
“My legislation establishes a safe and pro-growth regulatory framework that will unleash innovation and advance the president’s mission to make America the world capital of crypto,” Hagerty, a Tennessee Republican, said in a statement.
The bill is co-sponsored by Sens. Tim Scott, R-S.C., and Cynthia Lummis, R-Wyo., and Sen. Kristen Gillibrand, D-N.Y.
Dubbed the Guiding and Establishing National Innovation for U.S. Stablecoins — or GENIUS – Act, the bill creates rules for issuing stablecoin payments and requirements to back stablecoin payments with assets such as U.S. currency, Federal Reserve notes, or Treasury bills, the Bloomberg report said.
The bill comes as stablecoins are being “increasingly heralded as the bridge between traditional finance and the cryptocurrency world, have started to change that dynamic,” as PYMNTS wrote last month.
“This isn’t about replacing existing systems. It’s about providing an additional option. Where stablecoins offer superior benefits, customers will naturally gravitate toward them,” Miles Paschini, CEO at FV Bank, said in an interview PYMNTS.
“As more banks integrate blockchain capabilities, customers will have greater choice in transferring value,” he added. “We’re blazing the trail for a future where blockchain is just another payment rail.”
A recent report from the Federal Reserve of Atlanta found that while the future of stablecoins as a payment method is still unwritten, their adoption could one day rival credit or debit cards, with the stablecoin market value “comparable to the gross domestic product of countries like New Zealand or Greece.”
In addition, retailers ranging from Overstock to Chipotle to Whole Foods to GameStop have begun accepting stablecoins.
“Unlike the usual crypto rollercoaster of value volatility, stablecoins bring an alleged dose of stability to the digital currency game, while at the same time being able to function as a store of value, a medium of exchange and a unit of account,” PYMNTS wrote.
