Senator Bill Hagerty Proposes Stablecoin Regulatory Framework

Republican Sen. Bill Hagerty plans to introduce a bill on Tuesday aimed at establishing a regulatory framework for stablecoins, as reported by Bloomberg.

Hagerty emphasized the bill’s intent to create a “safe and pro-growth regulatory framework” to foster innovation and support the President’s goal of positioning America as the leading hub for cryptocurrency.

The proposed legislation, titled Guiding and Establishing National Innovation for US Stablecoins, mandates that stablecoin payments be backed by Treasury bills, U.S. dollars, and Federal Reserve notes. Additionally, it requires stablecoin issuers to release audited reports monthly. Senators Kirsten Gillibrand (D-N.Y.), Tim Scott (R-S.C.), and Cynthia Lummis (R-Wyo.) are co-sponsoring the initiative.

The bill aims to implement “light-touch” regulatory standards for stablecoin issuers and seeks to define whether federal or state authorities would regulate these entities.

Hagerty previously released a discussion draft similar to the Clarity for Payment Stablecoins Act, which was collaboratively developed in the House of Representatives by Rep. Maxine Waters (D-Calif.) and former House Financial Services Committee Chair Patrick McHenry (R-N.C.) in 2022. However, it’s uncertain if Hagerty’s bill aligns closely with this draft, as his office did not provide immediate comments.

Efforts to pass stablecoin legislation have faced challenges in Congress. Although McHenry and Waters have been advocating for a regulatory framework since 2022, their bill has made limited progress. Waters previously criticized the bill for allowing state regulators to approve stablecoin issuances without Federal Reserve input, labeling it as “deeply problematic.”

President Donald Trump has expressed support for the cryptocurrency industry, declaring in August that he would strive to make the United States the world’s crypto capital. He later issued an executive order to develop a comprehensive federal regulatory framework for digital assets, targeting stablecoins as part of the initiative.

Update: Feb. 4, 4:10 p.m. UTC to include further details regarding the proposed bill.