After several weeks of negotiations and amendments to the GENIUS Act, the Senate finally approved the bill on Tuesday. This act, which seeks to establish a solid regulatory framework for stablecoins, passed the floor with bipartisan support. However, it will now need to pass a vote in the House of Representatives before it heads over to President Donald Trump’s desk for his signature.
“The U.S. approving its first major federal legislation focused on stablecoins is a pivotal step in shaping the country’s digital asset future and addressing oversight of the rapidly growing digital asset ecosystem,” Liat Shetret, vice president of Global Policy and Regulation at Elliptic, a blockchain intelligence firm, told a prominent crypto media.
The highlights of the GENIUS Act
The Genius Act is a regulatory framework that prioritizes user protection. To ensure the safety of the users, the act has some criteria that a stablecoin issuer should follow. For instance, the issuer of a stablecoin shall “maintain reserves backing the issuer’s payment stablecoins outstanding on an at least 1 to 1 basis, with reserves comprising”. Additionally, the issuer of the stablecoin will have to do an audit of its accounts with a public accounting company every month. Furthermore, the act also had clauses that would help the stablecoin issue have liquidity.
However, Senate Republican, Josh Hawley (R-MO) along with some Senate Democrats like Elizabeth Warren (D-MA) voted against the act as they argued the GENIUS act would allow Big Tech companies to issue their own stablecoins and track user spending activity under some criteria. They believe “big Tech companies’ issuing or controlling their own private currencies, like a stablecoin, would threaten competition across the economy, erode financial privacy, and cede control of the U.S. money supply to monopolistic platforms that have a history of abusing their power.”
