In a significant move for the cryptocurrency industry, the US Senate has passed the GENIUS Act, a bill aimed at regulating stablecoins and providing clarity on digital assets. The bill was passed with a bipartisan vote of 68-30, marking a major milestone in the country's financial infrastructure.
Key Provisions of the GENIUS Act
Stablecoin Reserve Requirements: Stablecoin issuers must maintain full reserves backed by US dollars or similar liquid assets, such as short-term treasury bills.
Monthly Audits and Disclosures: Issuers are required to undergo monthly audits and public disclosures of their reserves.
Anti-Money Laundering Compliance: Stablecoin issuers must comply with anti-money laundering laws and regulations.
Regulatory Authority: The Treasury Secretary will have significant regulatory authority over the stablecoin market.
Bankruptcy Priority: Stablecoin owners will be given priority in bankruptcy cases, protecting their funds in the event of issuer insolvency.
Impact on the Cryptocurrency Industry
The GENIUS Act's passage is expected to boost confidence in stablecoins, which are considered a safer and less volatile form of cryptocurrency. The bill's provisions will also apply to foreign issuers, ensuring a level playing field for all stablecoin issuers operating in the US.
Next Steps
The bill now heads to the House of Representatives, where it will need to be reconciled with a similar bill, the STABLE Act. If passed, the legislation will go to President Donald Trump's desk for signature, cementing the US's position as a leader in cryptocurrency innovation and regulation.
Industry Reaction
Senator Bill Hagerty, who introduced the bill, hailed its passage as a "defining moment for US financial infrastructure." Industry experts have also welcomed the bill, citing the need for clear regulatory standards. However, some critics, including Senator Elizabeth Warren, have expressed concerns that the bill still falls short in terms of consumer protection.