Story Highlights
- The GENIUS Act update strengthens consumer protections and risk mitigation.
- US stablecoin issuers, such as USDC, benefit from stronger foreign competition regulations.
- The Federal Reserve will oversee stablecoins with a market worth of more than $10B.
The U.S. Senate Banking Committee will take a vote on the amended Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act on March 13. The GOP-sponsored legislation, as it has been amended in bicameral negotiations, would oversee stablecoins while spurring innovation and consumer protection.
Senator Bill Hagerty, the author of the bill, reiterated that an open and transparent regulatory environment for stablecoins will make transactions faster and grow demand for U.S. Treasuries. He termed the bill as pro-growth and in keeping with the administration’s vision of seeing America at the leadership position in cryptocurrency.
GENIUS Act Update Bolsters Stablecoin Regulations and Empowers U.S. Issuers
Senator Kirsten Gillibrand highlighted the bill’s bipartisan nature by saying that the revised bill accompanies increased consumer protection, more explicit regulations on stablecoin issuers, and more effective risk-mitigation measures. She also said that it is important to have an open and transparent regulatory space in a bid to support innovation as well as stability of the U.S. dollar.
According to the revised bill, the large stablecoins that have over a market value of $10 billion, Circle’s USD Coin (USDC) and Tether (USDT) included , would fall under the regulations of the Federal Reserve. The small stablecoin issuers can instead choose to seek regulation on a state basis, though, which would offer them greater latitude in being in compliance.
Industry experts recommend that the amended bill could level the playing field for U.S.-based stablecoin issuers. Firms such as Circle (USDC) and Ripple Labs (RLUSD) will gain, since the bill places high reserve and liquidity demands on foreign stablecoin issuers.
Web3 learning app co-founder Dom Kwok noted that the new standards of compliance build a higher wall for non-U.S. issuers. Crypto attorney Jeremy Hogan concurred, adding that the bill’s provisions appear to complement existing U.S. stablecoin frameworks, and they particularly favor USDC and RLUSD.
With the Senate Banking Committee vote scheduled soon, the GENIUS Act would revolutionize the stablecoin industry by enhancing U.S. dominance of digital asset regulation. Upon approval, the bill is set to develop a more formalized and competitive ecosystem, positioning the U.S. at the forefront of stablecoin regulation.
