#GENIUSAct

What is the GENIUS Act?

The GENIUS Act concerns the issuance and exchange of stablecoins, a form of digital currency backed by another form of currency like the U.S. dollar or a commodity like gold.

Stablecoins are designed to be less volatile than other forms of cryptocurrency, which can experience large price swings and, in turn, pose difficulty for individuals using them to facilitate a purchase or sale.

The bill sets rules for stablecoin issuers, including a mandate that firms hold a reserve of assets underlying the cryptocurrency. That stipulation aims to protect consumers, who otherwise risk a failure to cash out their holdings in the event of a rapid, widespread offloading of coins.

In a separate effort to safeguard consumers, the measure would require issuers to grant coin holders priority for repayment in the event of a bankruptcy. The measure also mandates issuers abide by some anti-money laundering rules and anti-terrorism sanctions.