In a noteworthy move, Senate Majority Leader John Thune (Republican) is pushing to expedite the passage of the GENIUS Act – the first bill to create a comprehensive legal framework for stablecoins in the United States. Although seen as a major breakthrough to strengthen the USD’s position in the global financial system, this bill is facing strong opposition from both traditional banking and major players in the crypto industry.
GENIUS Act – Plan to 'normalize' stablecoins in the US
Proposed by Senator Bill Hagerty and co-sponsored by Tim Scott and Cynthia Lummis, #GENIUSAct aims to regulate USD-pegged stablecoins – including tokens issued by non-bank organizations. This is seen as a key step in President Donald Trump’s administration’s effort to establish a clear legal framework for digital assets.
The difference between the GENIUS Act and the STABLE Act
Compared to the STABLE Act currently under consideration in the House, the GENIUS Act has some 'looser' points:
Allows the use of money market funds as reserve assets, while #STABLEAct is more restrictive.
Does not temporarily ban algorithmic stablecoins like the STABLE Act (which postpones for 2 years) but only requires a short-term assessment study.
Issuance cap threshold of $10 billion but with a more flexible approach.
The $TRUMP administration is reportedly looking to have both bills signed into law before the August congressional recess, indicating a high priority level for the stablecoin sector.
What do banks and crypto say? No one... is satisfied
Surprisingly: traditional banks oppose it, and major crypto companies are also lukewarm.
Arthur Wilmarth, a law professor at George Washington University, criticized the GENIUS Act as a 'serious mistake' that could threaten the stability of the financial system by allowing non-bank organizations to issue stablecoins – calling this 'shadow transactions' competing with banks insured by the FDIC.
Major players like Coinbase (the largest crypto exchange in the US) and the Andreessen Horowitz investment fund are reportedly working to block both bills. According to sources, they are concerned that the new laws will restrict the operations of existing stablecoins, hindering technological innovation or reducing market control.
Potential impacts on the crypto market and Binance users
If passed, the GENIUS Act could be the first step towards legalizing stablecoins in the US – which could trigger similar regulatory waves in other countries. This brings positive signals for transparency and market stability of stablecoins but could also lead to significant changes in the operating model of crypto organizations, especially for those not complying with current reserve standards or operations.
For Binance users, the US passing laws on stablecoins could help boost confidence in US-origin stablecoins like USDC, while also paving the way for safer DeFi products and cross-border payments. However, it is also essential to monitor subsequent developments, as tightened legal regulations may come with restrictions on the flexibility that crypto once had.
Risk warning: The cryptocurrency market always carries legal, price volatility, and control risks. Changes in US policy can affect the entire global market. Always do thorough research and invest responsibly.
