#StablecoinLaw The US has recently passed landmark stablecoin regulation, specifically the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act). This law aims to establish a comprehensive regulatory framework for stablecoins. Key provisions include:
- Reserve Requirements: Stablecoins must be backed one-to-one with reserves held in liquid assets, such as US Treasuries.
- Annual Audits: Issuers with a market capitalization exceeding $50 billion will be subject to annual audits to ensure compliance.
- Regulatory Oversight: Federal or state regulators will oversee stablecoin issuers to enhance transparency and consumer protection.
- Licensing Tiers: Issuers with under $10 billion in stablecoins can seek state-level licenses, while larger entities require federal oversight.
- AML and KYC Compliance: Aligning stablecoin operations with traditional banking standards.
Other notable stablecoin regulations include:
- UK's Stablecoin Laws: Expected to introduce comprehensive stablecoin regulations within months, requiring issuers to operate with a license and maintain full reserve asset coverage.
- Hong Kong's Stablecoin Ordinance: Requires issuers to have full (100%) reserve asset coverage and third-party custody, with the added flexibility of choosing different fiat currencies for issuance.
- STABLE Act: A proposed bill that would establish a federal regulatory framework for payment stablecoins, requiring licensing, 1:1 reserve backing, and monthly audited reporting.
These regulations aim to provide clarity and stability to the stablecoin market, paving the way for increased adoption and institutional investment.