After the GENIUS Act failed to gain support in the Senate last week, lawmakers introduced several bipartisan amendments. These changes are significant concessions to the anti-cryptocurrency faction, introducing a number of important restrictions.
In particular, they prohibit tech giants from issuing stablecoins, and in some cases, even from holding them. These amendments increase the transparency of stablecoins and allow for enforcement actions against companies that do not comply with the norms.
Will the GENIUS Act be passed with the new amendments?
Regulating stablecoins is a priority issue for U.S. cryptocurrency legislation, and the GENIUS Act currently remains the best prospect for its implementation.
Although its passage seemed likely last week, the bill did not pass in the Senate due to strong opposition from Democrats and defection from Republicans. However, rumors suggest that new bipartisan amendments to the GENIUS Act may facilitate its advancement.
Overall, the amendments to the GENIUS Act focus on addressing the issues that caused its failure last week. In particular, they aim to reduce the potential for fraud by clearly stating that these financial instruments are not covered by the Federal Deposit Insurance Corporation (FDIC) or federal support.
However, one amendment stands out particularly, having significant implications:
"Prohibits non-financial public companies from issuing stablecoins unless they meet strict criteria regarding financial risks, consumer data protection, and fair business practices. This helps prevent the issuance of stablecoins by companies like Meta, Amazon, Google, and Microsoft, and supports the separation between banking and commercial activities," reads a post from one of the versions.
Reports suggest that these amendments to the GENIUS Act come from two sources in the Senate. At the same time, another version is circulating that suggests tech giants may be prohibited from holding stablecoins in any form.
Since the text of the bill has not yet been finalized, any of these versions could be accurate. Specific amendments and their goals
Skeptical lawmakers have good reason to consider regulating stablecoins a top priority, as these assets attract significant attention in the news. In addition to the widespread use of stablecoins in everyday criminal activities, the amendments to the GENIUS Act seem to be designed with recent specific incidents in mind.
For example, the requirement to ban direct use of branding associated with the U.S. for stablecoins. The USD1 stablecoin linked to Trump sparked significant debate without having a direct connection to the government.
The amendments to the GENIUS Act aim to prohibit tech giants from launching stablecoins, which became relevant after Meta proposed their use just a week ago. Most importantly, the amendments to the GENIUS Act are clearly aimed at "maintaining the separation between banking and commercial activities." The company Tether has invested extremely large resources into new stablecoin opportunities in the U.S., spending $65 billion on U.S. government bonds in just three months.
Tech giants have significant financial resources, so they require strict limitations. Other amendments to the GENIUS Act detail several such restrictions. For example, they streamline the requirements for taking enforcement action against stablecoin issuers.
They also place these measures under the jurisdiction of the U.S. Department of the Treasury, as other regulators, such as the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), have experienced significant weakening.
Moreover, one of the amendments explicitly names Elon Musk, the founder of Tesla, as a federal official with significant conflicts of interest on this issue, although other individuals are also mentioned.
Given that these amendments have not yet been finalized, it remains unclear whether the GENIUS Act will be passed. However, in any case, these proposals represent a significant victory for the crypto-skeptic faction in Congress.#BinanceSquare #Write2Earn #crypto #trading #Binance $ETH