The US Stablecoin Bill, known as the GENIUS Act, is the first comprehensive federal attempt in the United States to regulate stablecoins. Here are the key points:

Main points of the law:

Definition of stablecoins: They are defined as digital currencies designated for payments, and they must be backed 1:1 by US dollars or highly liquid assets.

Licensing of issuers: Only entities approved by federal or state regulatory agencies can issue these currencies; otherwise, it is considered a crime.

Oversight: Federal and local banking authorities will oversee issuers based on their type.

Consumer protection: It is prohibited to promote currencies as being government-backed or insured by the FDIC if they are not.

Regulatory loophole: Foreign currencies like Tether will be exempt from the law.

Political and ethical controversy:

Democratic withdrawal: A number of Democratic senators have withdrawn their support for the bill due to concerns related to money laundering and national security.

Trump family's involvement: Widespread criticism followed revelations of the Trump family's connection to a company issuing the USD1 currency backed by a massive $2 billion deal.

Concerns from big tech companies: Worries that the current provisions may allow companies like Meta and X to enter the financial space in a way that threatens traditional banks.