GENIUS vs. STABLE: How the US Stablecoin Bills Before Congress Stack Up

Stablecoin regulation is coming to the United States. Two stablecoin bills — from the House and Senate — have already made their way through their respective congressional committees. But it remains to be seen how their differences will be reconciled before stablecoin regulation can pass into law in the U.S.

President Donald Trump has said he wants it before Congress goes on recess in August.

During the The Digital Chamber DC Blockchain Summit on March 26, Rep. Bryan Steil, Chair of the Digital Assets Subcommittee and co-sponsor of the House’s stablecoin bill, said that the two bills are roughly “80% similar.”

Indeed, on the biggest issues they are largely in sync. And for many onlookers, the main focus is seeing these bills continue to progress.

Just this past Wednesday, April 2, the House Committee on Financial Services followed the Senate’s lead by passing its stablecoin bill out of committee and sending it to the full House for a vote.

"The passage of these bills out of their respective committees with healthy bipartisan support is an encouraging development for crypto as the policymaking process picks up pace,” said Salah Ghazzal, Policy and Legislative Analysis Manager at The Blockchain Association — a U.S. nonprofit trade association — in an email to The Defiant.

Commenting on the larger significance of stablecoin regulation in the U.S., Ghazzal repeated a commonly held narrative around regulatory clarity and the dominance of the dollar globally:

“Providing regulatory clarity around stablecoins is an important and logical step that will promote the dollar’s dominance abroad and support domestic innovation in financial services.”

Speaking at a press conference on Feb. 4, Whitehouse AI and Crypto Czar David Sacks expressed a similar sentiment, stating that stablecoins “really have the potential to ensure American dollar dominance internationally, to increase the usage of the U.S. dollar digitally as the world's reserve currency, and in the process, create potentially trillions of dollars of demand for U.S. Treasuries, which could lower long term interest rates.”

Indeed, stablecoin legislation — as well as a market structure bill — is something that prominent representatives of the U.S. crypto industry have been seeking for a long time. And both the Trump administration and congressional leaders have promised that stablecoin regulation is the first step towards a broader regulatory regime for cryptocurrencies as a whole.

So how do the two bills currently before Congress compare and what makes them different? We took a deep dive into the latest versions of the bills to highlight the key differences, as well as where the bills — sometimes to the industry’s dismay — align.

The basics — breaking down the STABLE and GENIUS acts

The two bills currently before Congress are known as the Senate’s Guiding and Establishing National Innovation for U.S. Stablecoins Act, or GENIUS Act, and the House of Representatives’ Stablecoin Transparency and Accountability for a Better Ledger Economy, or STABLE Act. As stated, both have recently been passed out of committee, a key step for a full vote.

In general, the House’s STABLE Act is more restrictive than the Senate’s GENIUS Act on a few key points — notably around yield-bearing stablecoins and algorithmic stablecoin issuance.

As noted, however, both have many important things in common.

To start with, both define so-called “payment stablecoins” as digital assets that maintain a fixed value through backing by fiat currency or other specified forms of reserves, and that — as the name implies — are used for payments or settlement.

A key point for both the STABLE Act and GENIUS Act is around stablecoin issuance, allowing only qualifying issuers to launch stablecoins in the United States. But the two bills differ in how this is enforced, especially for foreign issuers.

Another key area both bills share is strict requirements around the reserves that issuers can use to back their stablecoins. Both mandate that stablecoin issuers maintain fully-backed reserves, but they differ in terms of types of reserves, with STABLE requiring more specific types of assets (namely government-backed securities).

The two bills also mandate that payment stablecoin issuers be primarily overseen by federal regulators, although the GENIUS Act offers more of a dual state-federal approach, depending on the stablecoin’s market cap.

Finally, in terms of key similarities, the GENIUS and STABLE acts specifically state that payment stablecoins are not securities, and the GENIUS Act states that they are neither securities nor commodities.

Beware of algorithmic stablecoins

Both of the stablecoin bills mandate a study, led by The Secretary of the Treasury, of what they call “endogenously collateralized stablecoins,” otherwise known as algorithmic stablecoins.

However, the STABLE Act goes further than the GENIUS Act regarding algorithmic stablecoins, imposing a two-year moratorium on new algorithmic stablecoins while the study is carried out and the results considered. 

“We would prefer that there isn’t a moratorium,” Peter Van Valkenburgh, executive director of CoinCenter, told The Defiant.

Noting that the U.S. rarely bans things outright when regulating technology, he suggested a principles-based approach like the securities laws.

Pointing to the Terra/Luna collapse that is behind the algorithmic stablecoin ban, Van Valkenburgh said, “I think something is missing from the dialog. Under existing securities laws it would’ve been trivially easy to police that fraud.”

Regulating stablecoin issuers

The proposed legislation in both bills stipulates that issuers of payment stablecoins must be banks, credit unions and approved non-bank institutions. Both bills require monthly reserve audits by certified public accounting firms. They also place restrictions on how these issuing institutions can manage their reserves.

Per both bills, permitted payment stablecoin issuers under the proposed legislation will be limited in their activities. They can issue and redeem stablecoins, manage reserve assets, custody stablecoins and the private keys of stablecoins, and take other actions that directly support the work of issuing and redeeming stablecoins — and nothing more.

Both bills also require payment stablecoin issuers to abide by the Bank Secrecy Act, labeling them financial institutions for this purpose.

Additionally, the STABLE Act prohibits anyone convicted of a number of felonies including money laundering, cybercrime and financial fraud, from being an officer or director of a stablecoin issuer, while the GENIUS Act doesn’t include similar restrictions.

The two bills also differ in terms of how issuers are regulated. Though both prioritize federal regulators, the GENIUS Act allows state regulators to license and oversee stablecoins with a market cap of under $10 billion (placing USDC and USDT clearly under federal oversight).

The STABLE Act has removed a similar $10 billion limit on state issuers seen in earlier drafts. However it gives federal regulators more authority to step in when deemed necessary. And state rules must meet or exceed federal regulations.

In general, The STABLE Act gives issuers a two-year grace period to become compliant, and imposes U.S. regulations directly on foreign issuers looking to operate in the U.S. The GENIUS Act, on the other hand, doesn’t specify timing for a grace period and suggests a more cooperative approach to international regulations for issuers from countries with “comparable” regulatory regimes.

Notably, both bills include a nod to the SEC’s infamous Staff Accounting Bulletin 121 (SAB 121), which recommended that banks classify crypto as liabilities on their books, effectively making it impossible for banks to act as crypto custodians. The bills explicitly prohibit relevant agencies from requiring banks and credit unions to classify custodied assets as liabilities on their books.

Common ground: yield-bearing stablecoins

A key point of agreement in both bills — and a point that has faced criticism from industry leaders — is that consumers should not be able to earn interest on payment stablecoins.

The STABLE Act prohibits offering yield on payment stablecoins outright. The GENIUS Act, on the other hand, was amended in committee specifically to also exclude yield-bearing stablecoins from the definition of payment stablecoins in the bill — meaning that a yield-bearing stablecoin could be considered a security, unlike payment stablecoins, and is not the focus of the bill.

Critics point out that opposing yield-bearing stablecoins only supports the banks, which don’t want the competition yield-bearing stablecoins would give to traditional interest-bearing bank accounts.

Sen. Kirsten Gillibrand, the Democratic co-sponsor of the GENIUS Act, summarized this pro-bank position in comments during the March 26 DC Blockchain Summit:

That led Bitwise CIO Matt Hougan to say on X a few days later: “I hate this argument against yield-bearing stablecoins by Senator Gillebrand [sic] so much. The answer to her question is ‘mortgage providers.’ Does she really think the free market will not find a way to loan money to people who want houses?”

Moving forward

While the Senate's GENIUS Act and the House's STABLE Act share significant similarities, key differences in their approaches — especially in terms of requirements for both domestic and foreign stablecoin issuers and how they’re regulated — could shape the future of stablecoin regulation in the U.S.

With bipartisan support and a push for swift action directly from the President, the passage of stablecoin legislation in the U.S. is closer than ever and is poised to set the stage for broader cryptocurrency regulation in the country.