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Four US senators have introduced a new bill to regulate payment stablecoins, in a move that borrows mostly from an existing bill and clashes with legislative plans outlined in a Trump executive order on crypto and AI.

Earlier this week, Senators Tim Scott (R-SC), Bill Hagerty (R-TN), Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) introduced the .

Also known as the GENIUS Act, the bill aims to establish a clear regulatory framework for payment stablecoins, including a new licensing regime for issuers, transparency and prudential standards.

The four senators are all members of the Senate Banking Committee, which, since President Trump’s election victory, is now chaired by Senator Scott.

“Stablecoins enable faster, cheaper and competitive transactions in our digital world and facilitate seamless cross-border payments,” said Scott.

“This legislation will expand financial inclusion and provide much-needed clarity to ensure the industry can innovate and grow here in the US, while protecting consumers and promoting the US dollar’s global position.”

If adopted, the GENIUS Act would require issuers of stablecoins with a market cap of $10bn or more to be regulated at the federal level.

If the issuer is an insured depository institution, its primary regulator would continue to be its appropriate federal banking agency.

If the issuer is an insured credit union, its primary regulator would be the National Credit Union Association.

And if the issuer is a non-bank financial institution, its primary regulator would be the Office of the Comptroller of the Currency (OCC).

“The primary federal payment stablecoin regulator shall establish a process for the licensing and regulation of these entities,” the bill notes.

For issuers of stablecoins with a market cap of less than $10bn, the act would create an option to be regulated at the state level rather than the federal level.

However, state-level regulations must be “substantially similar” to those at the federal level, and they must be personally approved as such by the secretary of the Treasury Department.

States that wish to introduce their own regulatory regime must submit their proposal to the Treasury for approval within one year of enactment of the bill.

Persons that issue US dollar stablecoins without a licence will be subject to civil penalties and can be fined up to $100,000 per day.

Reserves, prudential standards, transparency

Aside from the $10bn market cap threshold and the division of state versus federal supervision, the remainder of the bill borrows heavily from other previous stablecoin bills, such as the .

For example, the GENIUS Act would require all stablecoins to be backed at least 1:1 at all times, and would permit the use of only a narrow range of reserve assets.

These would include US Treasury bills with a maturity of 93 days or less, or repurchase agreements with a maturity of seven days or less (that are backed by Treasury bills with a maturity of 90 days).

Shares in money market funds that invest only in US Treasury bills and repurchase agreements as described above would be permitted.

Demand deposits or insured shares at insured depository institutions would be permitted, as would central bank reserve deposits.

Issuers would have to publish monthly reports of their number of outstanding stablecoins and the amount and composition of their reserves.

These reports would need to be examined by a registered public accounting firm and would be submitted by the CEO and CFO of the stablecoin issuer to its primary regulator.

Knowingly submitting false statements to the primary regulator could result in criminal prosecution, up to 20 years’ imprisonment and/or a fine of up to $20m.

Moreover, issuers would be prohibited from using stablecoin reserves for any purpose other than to create liquidity in order to honour redemption requests.

Reserve assets may not be pledged, rehypothecated or reused in any other way (although, as described above, qualifying Treasury bills may be pledged as collateral for repurchase agreements).

Clash with Trump’s executive order

The GENIUS Act is the first stablecoin bill to be introduced to Congress since the publication of President Trump’s executive order on "”.

Published last week, the  created a new Working Group on Digital Asset Markets, which was tasked with taking a lead on the new administration’s legislative agenda.

The group is chaired by David Sacks, Trump’s special advisor for AI and crypto, and includes the heads or assistant heads of 11 other federal agencies and offices.

In Q3 2025, the group is expected to submit a report to the President detailing new regulatory and legislative proposals for digital assets, following a review of current rules and legislation.

“In particular, “ the order states, “the Working Group shall propose a federal regulatory framework governing the issuance and operation of digital assets, including stablecoins.

“The Working Group’s report shall consider provisions for market structure, oversight, consumer protection and risk management.”

Clarity for Payment Stablecoins Act pushed aside

The GENIUS Act also undercuts the , a similar bill that tackles reserve asset requirements, transparency rules and consumer protection rights.

In July 2024, the Clarity Act was marked up by the House Financial Services Committee and introduced to the House of Representatives for debate and a future vote.

The lead sponsor of the bill was Representative Patrick McHenry (R-NC), who, when he introduced the bill to the House Financial Services Committee in 2023, was a ranking member of the committee.

Following Trump’s election victory, McHenry briefly served as chair of the committee. But in mid-December, the House Republican Steering Committee appointed Representative French Hill (R-AR) as chair.

�ѳ����԰����� Hill on his appointment, noting that he trusts the Arkansas lawmaker to continue the committee’s legislative work on digital asset and stablecoin regulations.

“With French Hill at the helm, Republicans will build on our work from this Congress to finally enact a clear regulatory framework and robust consumer protections for the digital asset ecosystem,” said McHenry.

Less than two months after making this statement, what unity of purpose Congressional Republicans had under the previous administration appears to be breaking down — or at least appears to be under pressure — following Trump’s return to the presidency.