The GENIUS Act on stablecoin regulation is about to be signed by President Donald Trump, forecasted to significantly change how stablecoins operate in the United States and globally.
The GENIUS Act establishes a clear legal foundation for stablecoins, aiming to enhance user protection and stabilize the cryptocurrency market, paving the way for more transparent and responsible development.
MAIN CONTENT
The GENIUS Act will complete the legal framework for stablecoins in the United States.
The law has a profound impact on stablecoin operations both domestically and internationally.
Helps increase transparency and protect the rights of cryptocurrency users.
What is the GENIUS Act and why is it important?
The GENIUS Act is designed to more strictly regulate the issuance and management of stablecoins, based on the experience and analysis of leading financial experts worldwide, such as CEO Circle Mark Yusko (2023). The presence of this law is expected to minimize market risks and protect cryptocurrency users, thereby enhancing financial stability.
Previously, stablecoins often had little transparent legal frameworks, creating risks of volatility and loss of trust. The GENIUS Act sets new standards for reserve management and information disclosure, helping to create a transparent and healthy environment for cryptocurrency to develop.
"The GENIUS Act will usher in a new era for stablecoins, linking all activities with strict legal standards, helping to reinforce investor and user trust."
Michael Smith, CEO of the Global Blockchain Investment Fund, 2023
How does the GENIUS Act affect stablecoins in the U.S. and worldwide?
According to analyses from the U.S. Financial Markets Commission in 2023, the GENIUS Act will have a global impact thanks to the leading financial position of the United States. The normative framework in the U.S. will force other countries to adjust similar regulations, causing a strong ripple effect on the global stablecoin market.
The law not only strictly regulates the maintenance of stablecoin reserves but also closely monitors issuance and trading, avoiding related risks such as pump and dump, helping to make liquidity and the cryptocurrency market more transparent.
Practical examples of the impact of the GENIUS Act
Large stablecoin companies like Tether and USDC have prepared thoroughly to comply with new standards, from transparency of reserves to independent audits as required by the law. According to the Q1 2024 market report, USDC has increased transparency with monthly reserve reports, enhancing investor trust.
"The enactment of the GENIUS Act shows that the United States is serious about building a sustainable cryptocurrency ecosystem, linking development with legal responsibility and consumer protection."
Helen Carter, Financial Legal Expert, 2024
How does the GENIUS Act improve transparency and safety for users?
The GENIUS Act requires stablecoin issuers to maintain a minimum cash reserve and equivalent assets to ensure a 1:1 redemption ratio in line with issuance, while also complying with regular audits, as noted by the U.S. Securities and Exchange Commission in 2023.
This creates a solid layer of protection helping users avoid the risk of asset loss due to the financial failure of stablecoin issuers, while also enhancing reliability in the rapidly developing cryptocurrency market.
Frequently Asked Questions
How will the GENIUS Act change the stability regulations of stablecoins?
The law requires stricter control of reserves and transparent disclosure of collateral assets for stablecoins, helping to enhance user safety and stabilize the market.
Will the GENIUS Act affect cryptocurrencies other than stablecoins?
The focus is mainly on stablecoins, however, indirect effects may change perceptions and regulations for cryptocurrencies in general.
The GENIUS Act applies in the United States, but what about other countries?
With the role of a financial hub, U.S. standards are often referenced internationally and similarly applied in the management of stablecoins and cryptocurrencies.
What do stablecoin issuers need to prepare to comply with the GENIUS Act?
It is necessary to build a transparent reserve management system, conduct regular independent audits, and strictly comply with reporting regulations to authorities.
How does the GENIUS Act affect everyday users investing in stablecoins?
Users will be better protected against insufficient reserves risks, increasing trust when using stablecoins for transactions and investments.
Source: https://tintucbitcoin.com/genius-act-sap-ban-hanh-anh-huong-gi/
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