#StablecoinLaw The US Congress is advancing federal stablecoin legislation through two similar bills: the STABLE Act and the GENIUS Act. These bills aim to establish a regulatory framework for stablecoins, addressing concerns around consumer protection, financial stability and anti-money laundering.
*Key Provisions of the Bills:*
- *Reserve Requirements*: Stablecoin issuers must back their coins with tangible, liquid assets like US Treasuries or cash equivalents.
- *Licensing and Regulatory Framework*: The GENIUS Act establishes a licensing system for institutions issuing stablecoins, with guidelines for reserve requirements, transparency and compliance mechanisms.
- *State and Federal Oversight*: Dual regulatory oversight system, with state regulators overseeing smaller issuers and federal regulators overseeing larger ones.
- *Consumer Protection Measures*: Mandates full asset backing, clear redemption policies and regular third-party audits.
- *Anti-Money Laundering (AML) and Sanctions*: Stablecoin issuers must adhere to AML and sanctions regulations, treating them as financial institutions under the Bank Secrecy Act.
*Comparison of the Two Bills:*
- *GENIUS Act*:
- Allows smaller stablecoin issuers (<$10 billion market capitalization) to operate under state supervision.
- Requires monthly reserve certifications.
- Mandates transparency and consumer protection measures.
- *STABLE Act*:
- Prohibits stablecoin issuers from paying interest or yield to holders.
- Has a shorter effective date timeline (12 months after enactment vs. 18 months under the GENIUS Act).
- Prohibits algorithmic stablecoins after an 18-month period.
*Impact on the Industry:*
- Clear regulations could stimulate growth and innovation in the stablecoin market.
- Increased regulatory costs and compliance burdens may affect smaller players, potentially leading to market concentration.
- Foreign stablecoin issuers may face challenges accessing the US market due to strict compliance requirements.