Senate Approves GENIUS Act, Advancing Stablecoin Regulation

In a significant move for the digital asset space, the Senate has passed the Guidance End Innovation for Uniform Stablecoins (GENIUS) Act with a 68-30 vote. This bipartisan support propels the bill closer to becoming law, now heading to the House of Representatives for consideration.

Key Highlights:

• Senate Approval: The GENIUS Act secured a 68-30 vote in the Senate.
• Next Steps: The bill now moves to the House for deliberation and a vote.
• Presidential Approval: If passed by the House, the bill will go to the President to be signed into law.

The GENIUS Act aims to regulate stablecoin issuers in the U.S., requiring them to maintain full reserves backed by U.S. dollars, short-term Treasury bonds, or similarly liquid assets. It also mandates anti-money laundering (AML) protocols, transaction monitoring, and customer due diligence, aligning them with traditional financial institutions.

Bill’s Journey and Amendments

The bill faced initial opposition from Democrats, who cited weak consumer protections and unresolved conflicts of interest related to former President Trump’s crypto ventures. However, after weeks of bipartisan negotiations, key amendments were added to strengthen oversight and security measures.

“Today, in a bipartisan manner, the Senate passed its first major piece of legislation in this Congress with my bill, the GENIUS Act. With GENIUS, the United States is one step closer to becoming the crypto capital of the world,” Senator Bill Hagerty stated on X.

Industry Impact

Financial institutions and major corporations are closely watching the bill’s progress. Bank of America and Morgan Stanley are reportedly evaluating strategies to enter the stablecoin market, pending the outcome of the GENIUS Act. Companies like Amazon and Walmart are also exploring the use of stablecoins for transactional efficiency and customer rewards programs.

However, the GENIUS Act includes provisions that would make it illegal for non-financial companies to issue stablecoins independently without regulatory approval.

House Considerations

The House will decide whether to combine the GENIUS Act with its own market structure bill, the Clarity for Digital Asset Market Act (CLARITY Act). The CLARITY Act seeks to bring certain cryptocurrency regulations under the supervision of the Commodity Futures Trading Commission (CFTC).

The CLARITY Act divides regulatory oversight between the CFTC and the Securities and Exchange Commission (SEC). It stipulates that the CFTC oversees digital commodities and their spot markets, while the SEC retains jurisdiction over crypto investment contracts. The bill also outlines a joint regulatory effort between both agencies for the regulation of payment stablecoins.

The House must decide whether to advance with its bill or align with the Senate’s momentum by adopting the GENIUS Act as the legislative path forward.

Understanding Cryptocurrencies: FAQs

What is Bitcoin?

Bitcoin is the largest cryptocurrency by market capitalization, designed to serve as digital money. It operates without control from any single entity, eliminating the need for third-party involvement in financial transactions.

What are Altcoins?

Altcoins are any cryptocurrencies other than Bitcoin. Some consider Ethereum not to be an altcoin due to its significant role in the crypto ecosystem. Litecoin, for example, is an early altcoin, forked from the Bitcoin protocol.

What are Stablecoins?

Stablecoins are cryptocurrencies designed to maintain a stable price, often backed by a reserve of assets. Their value is typically pegged to a commodity or financial instrument, such as the U.S. dollar. Stablecoins aim to provide a stable entry and exit point for investors in the cryptocurrency market and allow investors to store value without the volatility associated with other cryptocurrencies.

What is Bitcoin Dominance?

Bitcoin dominance is the ratio between Bitcoin’s market capitalization and the total market capitalization of all cryptocurrencies. It indicates investor interest in Bitcoin. High BTC dominance often occurs before and during bull markets, as investors turn to relatively stable, high-market-cap cryptocurrencies like Bitcoin. A decline in BTC dominance often signals that investors are shifting capital to altcoins in search of higher returns.

Stay ahead of the curve in the fast-paced crypto world – explore the latest updates and trends at Cryptonewsfeeds.com.