The US Senate has successfully passed a bill aimed at regulating stablecoins, marking a significant move in the legislative control of digital assets.
Passage of the Bill in the Senate
The GENIUS Act was passed with a vote of 68-30, making it the first significant crypto legislation to receive bipartisan support in Congress after years of stalemate. Senator Bill Hagerty, the sponsor, stated that "this bill ensures stablecoins will be pegged to the US dollar and backed one-to-one by cash and short-term US Treasuries."
What the GENIUS Act Means for Stablecoin Issuers
If passed in the House, the bill will establish clear regulatory requirements for stablecoin issuers, coming under federal oversight likely through the OCC in coordination with the Treasury. Issuers will be required to maintain 100% reserves in cash or US Treasuries, provide monthly attestations, and undergo regular audits. The GENIUS Act also differentiates between custodial and algorithmic stablecoins.
Criticism and Open Questions
Despite the wide support, the GENIUS Act has faced criticism from progressive Democrats who argue that it does not sufficiently address systemic risks and illicit finance issues. Senator Elizabeth Warren expressed concerns that the bill allows for potential loopholes for foreign stablecoin actors and Big Tech's influence over the US financial system.
The bill now heads to the House, where its fate will also be tied to other digital asset regulatory frameworks. Significant discussions and amendments are expected, which could influence the future regulation of stablecoins.
