The future of the stablecoin bill in the United States is at a critical crossroads, marked by significant political and regulatory uncertainty. Initially, this legislation, known as the GENIUS Act, showed great promise of progress due to broad bipartisan support, reflecting widespread interest in regulating stable or stablecoins. However, recent events have drastically changed the landscape. Nine Democratic senators, including four who had originally strongly supported the proposal, suddenly withdrew their backing, raising doubts about the immediate viability of the bill.
The primary reason behind this withdrawal of support lies in deep concerns about national security and the inadequacy of measures aimed at preventing money laundering and other financial crimes related to cryptocurrencies. This situation clearly highlights the inherent complexity of creating effective regulatory frameworks for emerging financial technologies, particularly when national financial security is at stake.
As a direct consequence, this lack of consensus and political backlash could significantly prolong regulatory uncertainty surrounding the U.S. market for stablecoins and cryptocurrencies in general. This uncertainty has tangible and concerning effects on the business sector, especially among technology companies and financial institutions that develop, manage, or use stablecoins. Without clear and stable rules, these organizations face substantial challenges to continue their operations and execute long-term strategic plans, which could result in a marked slowdown in technological innovation in the sector.
Moreover, this regulatory ambiguity negatively affects public perception and widespread trust towards stablecoins. Consumers and businesses seek certainty and legal protection before widely adopting new financial technologies. In the absence of a robust and well-defined regulatory framework, reluctance towards the use of stablecoins increases, limiting their potential growth and adoption as efficient, secure, and alternative means of payment to the traditional financial system.
Legislation focuses on stablecoins backed by liquid and safe assets, such as U.S. dollars and short-term Treasury bonds. Although it does not mention specific names, the main stablecoins that could be affected include:
USDC: Issued by Circle, backed by cash reserves and Treasury bonds.
USDT (Tether): Issued by Tether, with reserves that have been subject to scrutiny and debates over their composition.
USD1: A new stablecoin proposed by World Liberty Financial, linked to the Trump family, which has raised concerns about potential conflicts of interest.
In this context, it is vital for U.S. legislators to achieve a delicate balance between implementing strict regulation that ensures national security and prevents financial crime, and allowing sufficient flexibility to foster technological and financial innovation. Appropriate regulation will not only protect consumers but also stimulate a conducive environment for the development of disruptive technologies. If this balance is not achieved soon, the United States risks falling behind other global jurisdictions that advance with clear and firm regulations, thus consolidating their positions in global leadership in the field of stablecoins and crypto assets.