#GENIUSAct
The GENIUS Act or National Innovation Guidance and Establishment Act for U.S. Stablecoins is a historic U.S. legislative proposal aimed at creating a comprehensive regulatory framework for payment stablecoins.
Key aspects include
Definition and Regulation
It defines payment stablecoins as digital assets designed for fixed-value payments and backed 1 to 1 by high-quality liquid assets such as U.S. dollars or short-term Treasury bills. Issuers are subject to a dual state and federal regulatory structure, with those having a market capitalization exceeding $10 billion being subject to federal oversight.
Consumer Protection
The law requires 1 to 1 reserve ratios, public disclosure of reserve holdings, regular audits, and prioritizes stablecoin holders in the event of bankruptcy. It also imposes strict compliance with anti-money laundering (AML) and Know Your Customer (KYC) regulations.
Innovation and U.S. Dollar Dominance
By providing regulatory clarity, the GENIUS Act seeks to promote responsible innovation in the digital asset space and strengthen the global influence of the U.S. dollar in digital finance, facilitating faster and cheaper cross-border payments.
