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A bill to provide for the regulation of payment stablecoins, and for other purposes.
2/5/2025, 11:56 AM
Summary of Bill S 394
The bill aims to address concerns about the potential risks and challenges posed by the use of stablecoins in the financial system. It seeks to ensure that stablecoin issuers are subject to appropriate regulatory oversight and that stablecoins are backed by sufficient reserves to maintain their stability.
Under the provisions of the bill, stablecoin issuers would be required to obtain a license from the appropriate regulatory authority and comply with certain reporting and disclosure requirements. The bill also includes provisions for the protection of consumers and the prevention of money laundering and other illicit activities. Overall, the Payment Stablecoin Regulation Act is intended to provide a framework for the regulation of stablecoins in order to promote financial stability and protect consumers. It is currently being considered by Congress and may undergo further revisions before being enacted into law.
Congressional Summary of S 394
Guiding and Establishing National Innovation for U.S. Stablecoins of 2025 or the GENIUS Act of 2025
This bill establishes a regulatory framework for payment stablecoins (digital assets which an issuer must redeem for a fixed monetary value).
Under the bill, only permitted issuers may issue a payment stablecoin in the United States. Permitted issuers must be a subsidiary of an insured depository institution, a federal-qualified nonbank payment stablecoin issuer, or a state-qualified payment stablecoin issuer. Permitted issuers must be regulated by the appropriate federal or state regulator. Permitted issuers may choose federal or state regulation; however, state regulation is limited to those with a stablecoin issuance of $10 billion or less.
Permitted issuers must maintain reserves backing the stablecoin on a one-to-one basis using U.S. currency or other similarly liquid assets, as specified. Permitted issuers must also publicly disclose their redemption policy and publish monthly the details of their reserves.
The bill sets forth requirements for (1) reusing reserves; (2) providing safekeeping services for stablecoins; and (3) supervisory, examination, and enforcement authority.
In a bankruptcy insolvency proceeding involving a payment stablecoin issuer, stablecoin holders have priority over all other claims.
Under the bill, permitted payment stablecoins are not considered securities under securities law. However, permitted issuers are subject to the Bank Secrecy Act for anti-money laundering and related purposes.
The Federal Reserve must create and implement agreements with other jurisdictions that similarly regulate stablecoins for the purpose of facilitating international transactions and interoperability with U.S. dollar-denominated stablecoins issued overseas.
