Final vote in the Senate imminent, stablecoin regulatory framework taking shape.
The US Senate is expected to hold a final vote on Tuesday (June 17) regarding the highly anticipated stablecoin regulation bill (Guiding and Establishing the National Innovation Act for Stablecoins in the US) (GENIUS Act). The Senate Democratic official website released a notification last Thursday (6/12) confirming that the vote time will be determined by consultations between the majority leader and the Democratic leader. The bill passed a motion to end debate last Wednesday (6/11) by a vote of 68 to 30, paving the way for a final vote.
(GENIUS Act) requires stablecoins to be fully backed by US dollars or equivalent liquid assets and implements federal regulation on issuing entities with a market capitalization exceeding $10 billion. The act also stipulates that entities with a market capitalization exceeding $50 billion must undergo annual audits and establish regulatory guidelines for foreign issuers. The Trump administration's advisory group has expressed support for the bill this week, and the president hopes to complete the legislative process by August.
Wall Street investment bank Bernstein predicted in a research report released on Monday (6/16) that the bill will pass and become law in the coming months. The report stated that after the bill passes, 'stablecoins will evolve from the cash flow track of cryptocurrencies to the cash flow track of the internet,' symbolizing a significant shift of stablecoins from digital asset settlement currencies to mainstream payment adoption. Currently, the total value of stablecoins supported by US dollars in circulation globally has exceeded $190 billion and is doubling in growth each year.
Wall Street optimistic about prospects, tech giants' issuance of currencies restricted.
Bernstein emphasized in a report that the (GENIUS Act) aims to bring stablecoin innovation back to the United States, providing a first-mover advantage for entities regulated by the US. The act considers stablecoins as digital cash, intending to promote these cryptocurrencies' mainstream adoption in payments, rather than just as settlement currencies for digital assets.
Notably, the act 'makes it extremely difficult for non-financial public companies to become stablecoin issuers.' Bernstein noted reports suggesting that Amazon and Walmart are exploring the possibility of using these cryptocurrencies. If e-commerce and tech platforms wish to adopt these cryptocurrencies, they will likely have to collaborate with US-regulated issuers rather than issuing their own stablecoins.
Further Reading
Walmart and Amazon are considering issuing stablecoins! Why are big companies jumping into the stablecoin race?
Inspired by the progress of the bill, the stock price of the recently IPO'd $USDC issuing company Circle (NYSE: CRCL) has risen over 31.07% in the past five days, reaching an all-time high. The market generally believes that a clear regulatory framework will provide greater development space and investor confidence for the stablecoin industry. (As of the time of writing, Circle's stock price is $147.75.)
Source: Yahoo! Finance The issuing company of $USDC, Circle, saw its stock price rise over 31.07% in the past five days.
Senator Warren expresses concern over corporate issuance of currencies, specifically naming Musk and Bezos.
However, not all lawmakers support the (GENIUS Act). Senator Elizabeth Warren publicly calls on Congress to amend the bill, warning that it may allow tech billionaires to issue private digital currencies. She posted on social media X:
'If Congress does not amend the (GENIUS Act), billionaires like Musk and Bezos will be able to launch stablecoins that track your purchasing behavior, exploit your data, and crowd out competitors.'
Source: X Senator Elizabeth Warren publicly calls on Congress to amend the bill, warning that it may allow tech billionaires to issue private digital currencies.
Warren's concerns stem from recent discussions about large companies like Amazon and Walmart considering launching their own stablecoins. She warns that without proper amendments, the (GENIUS Act) will create loopholes for large corporations and wealthy individuals, allowing them to introduce private currencies that operate outside existing bank regulations. Warren also warns that if these digital currencies fail, their creators may seek taxpayer-funded bailouts.
Missouri Senator Josh Hawley also stated that he would vote against the amended bill, claiming it is a 'huge concession to big tech companies.' Critics argue that the bill lacks strong protections to prevent big tech companies and retail giants from issuing private stablecoins that may operate like unofficial digital currencies, raising concerns about surveillance and monopolistic issues.
Privacy controversies continue to simmer, regulatory balance becomes the focus.
Warren's comments have sparked heated discussions on social media, with several users pointing out that she previously supported central bank digital currencies (CBDC), which may also involve data collection. Cryptocurrency lawyer John E. Deaton responded, 'You support the consumer CBDC issued by the Federal Reserve, so as long as the government is doing all the tracking and monitoring, it's okay?'
Source: X Cryptocurrency lawyer John E. Deaton responds to Warren's remarks.
Other commentators believe that stablecoins issued by corporations could bring healthy competition to the financial sector. Notable figure in the cryptocurrency field Fred Rispoli wrote, 'This bill will end your banking donors' monopoly on tracking our purchasing behavior.'
Source: X Prominent figure in the cryptocurrency field Fred Rispoli counters Warren's remarks.
Supporters of the bill believe that the (GENIUS Act) will provide a legal framework for stablecoins, improve the consumer experience, and set clear rules for the market. However, critics argue that without restrictions on corporate participation, the risks outweigh the benefits.
Senate aides pointed out, 'Family ties are the difficult part,' referring to President Trump’s relationship with World Liberty Financial, which recently launched its own stablecoin. Trump's growing connections with cryptocurrency companies have also raised questions about regulatory fairness and influence.
'Institutions optimistic about the GENIUS Act passing tonight! US lawmakers question: Is Musk preparing to issue a currency?' This article was first published in 'Crypto City.'
