Recently, the U.S. Congress passed the GENIUS Act, which pertains to stablecoin regulation. This legislation aims to establish federal rules for such digital currencies.
GENIUS Act for Stablecoin Regulation
The GENIUS Act was passed by Congress with a vote of 308 to 122 and is now headed to President Donald Trump for final approval.
Under this legislation, stablecoins pegged to the U.S. dollar must be fully backed by liquid assets such as cash or short-term Treasury securities. To enhance transparency, the composition of reserves must be published monthly.
Currently valued at over $262 billion, stablecoins are playing an increasingly central role in cryptocurrency trading and payments.
Clarity Act for Defining Crypto Asset Rules
Congress also enacted the Clarity Act, which categorizes the character of crypto assets. This legislation determines whether tokens should be regulated as securities or commodities and under which regulator, the SEC or CFTC.
It was passed with a vote of 294 to 134 and is supported by crypto companies seeking more legal direction. Critics, predominantly Democrats, have raised concerns over potential profits from President Trump's crypto investments.
CBDC Ban Bill Raises Privacy Concerns
Lawmakers approved a bill banning the creation of a U.S. central bank digital currency (CBDC). Supporters argue that a digital dollar could threaten privacy by allowing the government to track financial activities.
Although the Federal Reserve has studied the concept, there are currently no plans for launch. Trump had previously signed an executive order halting any CBDC developments.
The GENIUS Act is likely to become law soon, establishing the first federal framework for stablecoins. The Clarity Act and CBDC ban still require Senate approval before becoming law.
