#GENIUSActPass

What is the GENIUS Law?

The GENIUS Law relates to the issuance and exchange of stablecoins, which are a form of digital currency backed by another currency, such as the US dollar or a commodity like gold.

Stablecoins are designed to be less volatile than other forms of cryptocurrency, which can experience significant price fluctuations and thus create difficulties for individuals using them to facilitate buying or selling.

The bill sets rules for stablecoin issuers, including requiring companies to hold a reserve of the assets that back the cryptocurrency. This requirement aims to protect consumers who may struggle to withdraw their funds in the event of a rapid and widespread sell-off of the coins.

What do proponents and critics say about the GENIUS Law?

Supporters of the law praised this measure as the first effort of its kind to formalize a major sector of the cryptocurrency industry, provide safeguards for consumers, and allow traditional financial companies to enter and grow the digital currency market.

Catalini stated that this opens the door wide. We will see many issuers entering, which will provide consumers with broader options. This will enhance competition and innovation in the payments space.

He added that the new rules alleviate the burden on consumers in distinguishing between good and bad actors within the stablecoin sector.