- The Senate advanced the GENIUS Act with a 66-32 procedural vote, moving it closer to final passage.
- The GENIUS Act proposes a comprehensive framework for regulating stablecoins in the United States.
- The bill requires stablecoin issuers to maintain 1:1 reserves backed by U.S. dollars.
The Senate successfully forwarded the GENIUS Act on Monday night with a vote of 66 to 32 on a key procedural matter. The GENIUS Act will ensure stablecoins are regulated with detailed and comprehensive rules. The progress of the Senate Act helps propel the bill closer to being passed after the whole debate.
The sponsors of the GENIUS Act believe it will provide clarity and help reshape the U.S. stablecoin industry. The proposed rules create many regulations for stablecoins that will be overseen by the federal government, which could play a key role in shaping the industry.
Many major companies have adjusted their actions to support the Genius Act’s policies. Some amendments addressed issues raised by Senate Democrats earlier in the session, allowing the bill to receive bipartisan support and advance to the next stage in the House of Representatives.
Stablecoin Issuance Rules Under GENIUS Act
GENIUS Act regulations require the industry to reserve the same number of U.S. dollars as it does stablecoins. Such reserves are meant to be placed in very liquid assets so that the price stays steady and redemption is possible. Furthermore, stablecoin issuers will be inspected to ensure their reserves comply with the rules.
Federal government supervisors require stablecoins with a market cap of more than $10 billion to be registered. The intention is to track the impact of big stablecoins on the entire financial system. It also ensures that companies issuing securities are accountable by following the requirements established by federal laws.
The GENIUS Act will ensure that all banks meet stringent AML and KYC measures. By using regulated platforms, these steps protect the U.S. financial sector from illegal activities.
Political Scrutiny and Key Challenges
The GENIUS Act received considerable scrutiny because of possible ties between the Trump family and the World Liberty Foundation’s USD1 stablecoin. Some argue that the bill could benefit people linked to Trump due to their digital currency. Senate Democrats called for changes to address the ethical concerns before supporting the bill.
Although there was great debate, some Democrats cast a vote only after they made sure there would be no conflicts of interest. At the outset, Senators Elizabeth Warren and Bernie Sanders brought up issues related to ethics and regulations. Furthermore, the additional amendments made the bill easier for lawmakers to bring forward.
After this recent vote, the bill will undergo a final debate, with the next step being a vote in the House. The House is considering the STABLE Act separately before deciding whether it should join the GENIUS Act. One cohesive law may regulate stablecoins in the United States.
Crypto Leaders Back GENIUS Act Push
Key people from the crypto industry agreed with the GENIUS Act, describing how it could ease stablecoin access in the banking sector. Leaders from Coinbase, Circle, and U.S. regulatory bodies supported the Exploring Regulatory Advancements for the Cryptographic Asset Industry Act.
The bill might prompt other countries to adopt similar steps; this is already happening in Brazil. El Salvador is still engaged in growing digital currency, with good results from its Bitcoin. By passing the GENIUS Act, the U.S. looks to take an active role in overseeing crypto.
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