TLDR
US Senate passes GENIUS Act with bipartisan support, marking historic stablecoin regulation progress.
GENIUS Act mandates 1:1 reserve for stablecoins, boosting transparency and accountability.
Treasury to oversee stablecoin regulation, with audits and anti-money laundering provisions.
House to debate its version of the bill, with key differences in regulatory authority.
The US Senate has passed the GENIUS Act, a major bill to regulate stablecoins, with a 68-30 vote. This development marks a significant step for the crypto industry. The bill now moves to the US House of Representatives for further discussion and debate.
Bipartisan Support for Stablecoin Legislation
The GENIUS Act was passed with strong bipartisan support, signaling a unified approach to regulating the growing stablecoin market. This is the first major crypto-related bill to receive Senate approval.
Senators from both parties expressed their commitment to creating a framework that supports innovation while ensuring consumer protection and maintaining US dollar dominance.
Senator Bill Hagerty, one of the bill’s sponsors, celebrated the passing of the legislation. He emphasized that this bill will help position the US as a global leader in digital finance. “This is a pro-growth regulatory framework for stablecoins, which will drive innovation and protect the US economy,” Hagerty stated.
Key Provisions of the GENIUS Act
The GENIUS Act establishes the first federal framework for dollar-pegged stablecoins in the US. The bill requires stablecoin issuers to maintain a 1:1 reserve, which must be backed by cash or short-term US Treasuries. Issuers will also need to conduct monthly audits to ensure transparency and compliance with anti-money laundering standards.
This legislation is designed to open the stablecoin market to a wider range of issuers, including banks, fintech companies, and major retailers. The bill also grants the US Department of the Treasury broad authority over stablecoin regulation. Treasury Secretary Scott Bessent has voiced support for the bill, predicting that the US stablecoin market could grow significantly in the coming years.
The Path Ahead for the GENIUS Act
With the Senate’s approval, the GENIUS Act is now set to head to the House of Representatives. However, the House version of the bill, called the STABLE Act, has some differences in terms of regulatory authority.
While the Senate bill centralizes oversight with the Treasury, the House bill divides responsibilities among the Federal Reserve, the Comptroller of the Currency, and other agencies.
The House will now debate its version of the bill, and both versions will need to be reconciled before moving forward. The timing of this process is critical, as the White House has urged Congress to pass both the GENIUS Act and the CLARITY Act before the July recess.
Controversies and Challenges Ahead
Despite the bipartisan support, the bill faced opposition from some members of the Senate. Senator Jeff Merkley criticized the bill for not including a provision to prevent elected officials from personally profiting from digital assets. Merkley had proposed an amendment to bar public officials from issuing or endorsing digital assets, but this effort was blocked.
The passage of the GENIUS Act also comes amid increasing concerns over the role of major tech companies in the stablecoin market. While the bill allows banks and fintech firms to issue stablecoins, it restricts large tech companies from doing so unless they partner with regulated financial entities. This provision is meant to address concerns about monopolistic control in the digital currency space.
As the bill moves forward, lawmakers and industry stakeholders will continue to debate the scope of the regulation and its potential effects on the crypto market. The outcome of these discussions will likely shape the future of stablecoin issuance and regulation in the US.
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