#USStablecoinBill

Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act

The U.S. Stable coin Bill, particularly Section 110, clarifies that stable coins issued by approved entities are not considered securities. This means they won't be regulated by the SEC but instead by banking regulators. The bill ensures stable coins are backed 1:1 by safe assets like dollars or Treasury bonds, protecting users from loss. It also sets rules for who can issue stable coins, requiring proper licenses. If companies break the rules, they face heavy fines. The goal is to make stablecoins safer and more trustworthy while encouraging innovation. However, political disagreements, especially over oversight and foreign influence, have delayed progress on the bill.

The GENIUS Act establishes federal safeguards that protect stablecoin holders and enhance consumer confidence in the permitted payment stablecoin market, including requiring:

•100% reserve backing with U.S. dollars and short-term Treasuries, or similarly liquid assets as determined by the primary regulator.

•Monthly public disclosure of reserve composition.

•Annual audited financial statements for issuers with more than $50 billion in market capitalization.

•The GENIUS Act establishes strict marketing standards for payment stablecoins:

•Prohibits any representation that payment stablecoins are backed by the full faith and credit of the U.S., guaranteed by the U.S. government, or covered by FDIC insurance, making it unlawful to mislead consumers about government backing or the insurance status of payment stablecoins.

•Ensures that a payment stablecoin cannot be marketed in a way that a reasonable person would perceive the stablecoin to be legal tender, issued by the U.S., or guaranteed or approved by the U.S. government.

•Makes it illegal to market a digital asset as a payment stablecoin unless the digital asset is compliant with the provisions of the GENIUS Act