The GENIUS Act is being warned to lack essential protective measures for the American public in managing stablecoin, while also needing to balance innovation and protecting the banking system.
MAIN CONTENT
New York Attorney General responds to limitations in the GENIUS Act.
There is a need to adjust the stablecoin law to balance innovation and protect the financial system.
Proposal to regulate stablecoin issuers like banks and require digital identity verification.
Who is warning about the GENIUS Act and what is the main content of the warning?
New York Attorney General Letitia James directly warned the U.S. Congress that the GENIUS Act does not provide sufficient protection for the American people against the risks of stablecoin.
Ms. Letitia James emphasizes the need for caution and the drafting of appropriate laws to control stablecoin in a balanced way, encouraging innovation while protecting the traditional banking system from potential risks.
Why should caution be exercised when proposing laws on stablecoin?
According to the experience and views of financial officials, establishing a legal framework regarding stablecoin should avoid negative impacts on the market and the financial system.
Stablecoin is a bridge between cryptocurrency and the traditional financial system; without clear regulations, it could pose risks to the banking system and end users.
The legal process needs to create a balance between technological innovation and ensuring the safety of the financial system, avoiding regulations that hinder the sustainable development of the stablecoin market.
Letitia James, New York Attorney General, July 2024
What are Letitia James's specific proposals for stablecoin regulation?
Ms. Letitia James proposed applying regulations similar to banking regulations for stablecoin issuers, to enhance transparency and safety.
In addition, she urged that stablecoin owners be required to have digital identity certification, helping to enhance the effectiveness of control and prevention of illegal activities related to cryptocurrency.
What impact will regulating stablecoin issuers like banks have?
Bringing stablecoin issuers under banking regulations will help make the financial system more public and transparent, while also making it easier for regulatory authorities to monitor and control potential risks.
Financial expert, Mr. Michael Allen stated: "Bank-like regulations will force stablecoin issuers to strictly comply with capital and audit standards, thereby protecting user rights and stabilizing the system."
GENIUS Act criteria (currently) Proposal by Letitia James Regulation of stablecoin issuers No bank-like regulations Must be managed similarly to banks Verification of ownership identity Not strictly required Mandatory provision of digital certification User protection Lack of rigor Balance between protection and innovation
Frequently Asked Questions about the GENIUS Act and stablecoin regulation
What is the GENIUS Act? The GENIUS Act is a draft law related to stablecoin regulation but lacks measures to protect users and the banking system. Why is it necessary to control stablecoin issuers like banks? To increase transparency, protect user rights, and reduce risks to the traditional financial system. What is the effect of digital identity verification? It helps prevent money laundering, fraud, and enhances the effectiveness of law enforcement in the cryptocurrency market. Does the GENIUS Act regulate new technologies? The GENIUS Act currently does not balance well between encouraging technological innovation and protecting the financial system. Who is responsible for refining the stablecoin law? The U.S. Congress and regulatory agencies are discussing and reviewing proposals to finalize the law.
Source: https://tintucbitcoin.com/genius-act-thieu-bao-ve-nha-dau-tu/
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