Stablecoin Regulation Bill Proposed in U.S.

Senator Bill Hagerty introduced an updated bill to regulate the stablecoin market in the U.S., aiming to boost transparency and reliability in stablecoin-based payment systems.

Bill Hagerty, U.S. Senator from Tennessee and Member of the Senate Banking Committee, laid out a plan for the bill designed to establish a clear regulatory framework for overseeing stablecoin issuers.

The bill builds on a similar initiative presented by Patrick McHenry, Chair of the House Financial Services Committee, back in 2023. While Hagerty’s proposal uses McHenry’s draft as a foundation, he adds several key amendments to provide clarity and transparency in how stablecoins are used in the U.S.

According to Hagerty, his bill will create a strong legal foundation for stablecoin issuers, allowing stablecoins to be safely integrated into the U.S. payment infrastructure. The bill outlines specific requirements for stablecoin issuers, including:

• full transparency of reserves, so users can trust in the stability and security of the coins;
• holding reserves in highly liquid assets like government bonds, significantly reducing risks for token holders;
• regular audits of reserves by independent auditors to build trust in issuers and protect investors from potential financial losses.

The senator also proposed clarifying which regulators will be responsible for oversight. Under Hagerty’s bill, stablecoin issuers with a market cap of under $10 billion would be supervised by state-level financial regulators. Meanwhile, issuers with a higher market cap would fall under the supervision of the U.S. Office of the Comptroller of the Currency. The senator emphasized that a tailored regulatory approach will best support innovation while protecting consumers.

Hagerty’s bill is submitted to the U.S. House of Representatives, where discussions will continue until November 1.

Some U.S. officials oppose the issuance of a central bank digital currency (CBDC) in the country and are critical of the Securities and Exchange Commission’s (SEC) approach to crypto market regulation.