What is the GENIUS Act?
The GENIUS Act, or the National Innovation Guidance and Establishment Act for US Stablecoins, is a bill that focuses on the regulation of stablecoins. Stablecoins are cryptocurrencies designed to maintain a stable value, often pegged to a fiat currency like the US dollar or a commodity like gold. The act seeks to establish clear requirements for stablecoin issuers, as well as redemption practices and regulatory coordination between states and the federal government.
Main objectives of the GENIUS Act:
Establish a federal regulatory framework:
The act seeks to create a set of clear and consistent rules for stablecoins at the national level.
Protect consumers:
It aims to ensure that users can redeem their stablecoins for the backed value and avoid deceptive practices.
Prevent money laundering and terrorist financing:
The act includes measures to combat illicit activities related to stablecoins.
Federal-state coordination:
The act aims to establish mechanisms for collaboration between federal and state regulators.