#StablecoinLaw The US has taken a significant step in regulating stablecoins with the passage of the GENIUS Act, which aims to establish a federal framework for stablecoin issuers. Here's what's new
- *Key Provisions*
- *Full Asset Backing*: Stablecoins must be fully backed 1:1 by liquid assets like US dollars or Treasury securities.
- *Monthly Reserve Reports*: Issuers must publish monthly reserve reports and undergo regular audits.
- *Anti-Money Laundering*: The Act requires compliance with anti-money laundering and consumer protection rules.
- *Ban on Algorithmic Stablecoins*: Unbacked algorithmic stablecoins are outlawed, aiming to prevent Terra-like collapses.
- *Regulatory Framework*:
- *Federal License*: Issuers can operate under a federal license, regulated by bodies like the OCC or FDIC, or be supervised at the state level if they issue less than $10 billion.
- *Foreign Stablecoins*: Foreign stablecoins will only be allowed in the US if their country of origin meets regulatory standards similar to those in America.
- *Impact*:
- *Market Growth*: The stablecoin market, currently valued at over $260 billion, could grow to $2 trillion under this new structure.
- *Increased Legitimacy*: The law is expected to enhance stablecoins' credibility and make banks, retailers, and consumers more willing to use them for transactions.
- *Next Steps*:
- *Effective Date*: The GENIUS Act is expected to take effect 18 months after enactment or 120 days after federal agencies finalize rules.
- *Implementation*: Regulators will gear up for implementation, and the stablecoin industry will undergo a significant overhaul
