On June 17, the U.S. Senate passed the GENIUS Act aimed at regulating stablecoins. This marks the first comprehensive federal legislation for the cryptocurrency sector in the country.
Core Elements of the GENIUS Act
The GENIUS Act was approved by a vote of 51 to 23. It establishes rules for stablecoin issuers, requiring them to be fully backed by U.S. dollars or equivalent liquid assets. Additionally, issuers with market values exceeding $50 billion must undergo annual audits. The act also provides guidelines for foreign issuers and grants holders 'super-priority creditor' status in the event of issuer bankruptcy.
Limitations and Debates
Under the GENIUS Act, public companies such as Meta and Amazon face restrictions on issuing stablecoins. This is only permissible if they meet specific financial risk and consumer data privacy standards. Democrats have raised concerns regarding compliance of foreign issuers with anti-money laundering standards and corporate formation requirements.
Future of the Bill
The GENIUS Act will now be considered by the House of Representatives, which previously passed its own stablecoin bill through committee. Experts suggest that the House may adopt the GENIUS Act or merge stablecoin rules with a broader market structure bill.
The GENIUS Act represents a significant step towards stablecoin regulation in the U.S. and awaits consideration by the House of Representatives.
