#GENIUSAct The GENIUS Act (officially the "Guiding and Establishing National Innovation for US Stablecoins Act") is a landmark US federal law primarily focused on regulating payment stablecoins. Here are its main points, simply put:
* Regulates Stablecoins: It's the first comprehensive federal law in the US specifically designed to oversee stablecoins, which are cryptocurrencies pegged to stable assets like the US dollar.
* Consumer Protection: Aims to protect consumers by setting clear rules for stablecoin issuers, enhancing confidence in the market.
* 1:1 Reserves: Mandates that stablecoin issuers maintain 1:1 reserves in high-quality liquid assets (like US dollars or Treasury bills) to back every stablecoin issued, preventing "bank run" scenarios.
* Anti-Money Laundering (AML) & KYC: Requires stablecoin issuers to implement robust anti-money laundering and "know your customer" programs.
* No Interest Payments: Prohibits stablecoin issuers from paying interest or yield on stablecoin holdings, a measure to prevent speculative practices.
* Clear Legal Framework: Provides legal clarity by defining stablecoins and clarifying that compliant stablecoins are generally not considered securities.
* Dual Regulatory System: Establishes a system where stablecoin issuers can be regulated at either the federal or state level, with federal oversight for larger issuers (over $10 billion in circulation) and state supervision for smaller ones (under $10 billion) if their state regime is deemed comparable.
* Strengthens USD: Aims to strengthen the US dollar's position as the global reserve currency by ensuring US dollar-backed stablecoins are regulated and trustworthy, also potentially increasing demand for US Treasuries.
* **Promotes Innovation (with guardrails): Seeks to foster responsible innovation in the digital asset space by providing a clear regulatory path while ensuring financial stability and consumer safety.
* Restrictions on Foreign Stablecoins: Bars foreign-issued stablecoins from the US market unless their issuers comply with the Act's requirements or operate under a comparable, approved regulatory regime.
* No Central Bank Digital Currency (CBDC): The Act (or related discussions around it) also reflects opposition to the Federal Reserve issuing its own central bank digital currency.
