TLDR
Senate advances the GENIUS Act, paving the way for stablecoin regulation in the U.S. with bipartisan backing.
The GENIUS Act mandates transparency with annual audits for stablecoin issuers over $50B in market cap.
GENIUS Act seeks to regulate foreign stablecoin issuers while addressing banking sector concerns.
Key Senate vote brings the GENIUS Act closer to becoming law, but House negotiations await.
The GENIUS Act, a crucial piece of legislation aiming to regulate stablecoins in the United States, has advanced to the next stage after a key vote in the Senate. With bipartisan support, the bill now faces its final passage and could become law soon. On Wednesday, the Senate voted 68 to 30 to invoke cloture on the bill, setting the stage for further debate and a potential final vote next week.
GENIUS Act Stablecoin Bill Gains Senate Approval
The GENIUS Act, formally known as the Guiding and Establishing National Innovation for U.S. Stablecoins Act, received a significant boost with the Senate’s cloture vote. A cloture vote is a procedural move used to end debate and move forward with the legislation.
Following this vote, the bill is positioned for a final Senate vote, which could happen as early as next week.
Senate Majority Leader John Thune spoke on the Senate floor, emphasizing the importance of the bill in making the U.S. a leader in digital assets. He also pointed to the bipartisan effort that helped move the bill forward, signaling strong cross-party support. “We want to bring cryptocurrency into the mainstream, and the GENIUS Act will help us do that,” Thune stated.
Key Provisions of the Stablecoin Bill
The GENIUS Act aims to create a clear regulatory framework for stablecoins, which are digital currencies pegged to stable assets like the U.S. dollar. One of the key provisions of the bill is the requirement for stablecoin issuers to fully back their coins with U.S. dollars or similar liquid assets. This ensures that stablecoins maintain their value and stability.
Additionally, the bill mandates that issuers with a market capitalization exceeding $50 billion undergo annual audits to ensure transparency. Smaller stablecoin issuers, those with market caps under $10 billion, would be subject to state-level regulations designed to promote transparency in their operations.
The bill also addresses concerns from the banking sector about competition from interest-yielding stablecoins. Some provisions in the bill could lead to restrictions on such stablecoins to prevent them from competing with traditional deposit accounts.
Challenges Ahead for the GENIUS Act
Despite the progress in the Senate, the path ahead for the GENIUS Act is not entirely clear. While the bill has gained support from both Republicans and Democrats, there are still disagreements that could affect its final passage. Some Democrats, such as Senator Elizabeth Warren, raised concerns about potential loopholes in the bill, particularly regarding foreign issuers and anti-money laundering standards.
Warren also pointed to concerns over the relationship between President Donald Trump and the cryptocurrency industry. She has voiced apprehension that the bill could benefit entities connected to Trump, given his ties to the crypto space and his involvement with companies launching stablecoins.
Nonetheless, the bill has garnered significant backing, including from Trump’s advisors, who expressed support for the bill. According to a statement from the White House, if the bill reaches President Trump’s desk, his advisors would recommend that he sign it into law.
Next Steps and House Considerations
While the GENIUS Act has advanced in the Senate, it still requires approval from the House of Representatives. The House Financial Services Committee has already passed its own version of stablecoin legislation, known as the Stablecoin Transparency and Accountability for a Better Ledger Economy Act. However, there are key differences between the two bills, particularly regarding the regulation of foreign stablecoin issuers.
The two chambers will need to reconcile their differences before a final version of the bill can be sent to the President for approval. Both bills include provisions on stablecoin issuance, reserve requirements, and transparency, but the details vary in areas like the regulatory role of states versus the federal government.
If the Senate’s version of the GENIUS Act is approved, the next major step will be negotiations between the House and Senate to align their respective bills. This process may take time, but the Senate’s recent vote has moved the bill closer to becoming a law.
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