This week, the U.S. Congress approved the GENIUS Act, aimed at regulating stablecoins, which may significantly alter the cryptocurrency market.
Congress Approves Legislation
The U.S. Congress has approved the GENIUS Act and the CLARITY Act. After a pause in voting, both acts received bipartisan support. The stablecoin bill was backed by 102 Democrats and 206 Republicans.
Details of the GENIUS Act
The GENIUS Act will allow only U.S.-licensed issuers to issue stablecoins. Issuers must back USD-indexed tokens with reserves at a 1:1 ratio. Transparency requirements mandate monthly disclosures of reserves.
Benefits of Regulation for the Market
Regulating stablecoins provides the market with clear frameworks, easing the entrance of traditional finance. The law bans the issuance of central bank digital currencies, while stabilizing the stablecoin market aims to mitigate losses in their value.
The passage of the GENIUS Act opens new opportunities for the cryptocurrency market by establishing clear requirements for issuers and promoting a safer financial environment.
