US Senators Gear Up for Revote on Enhanced Stablecoin Legislation
In a move aimed at advancing the dialogue surrounding stablecoin regulation in the United States, Senators are poised to reconsider a pivotal bill. This legislation, initially stalled due to opposition, has been revamped with bipartisan amendments to address previous criticisms and secure broader support.
Revised Stablecoin Bill Awaits Second Senate Vote
Following an unsuccessful attempt to pass through the Senate, Senator John Thune has initiated another cloture motion on the revised “Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act.” This effort, marked by bipartisan collaboration, seeks to revive the bill in the coming weeks. Originally led by Republican Senator Bill Hagerty, the legislative proposal fell short on May 8, securing only 49 out of the required 60 votes for a debate initiation.
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The GENIUS Act, once hailed as a bipartisan initiative, faced a setback with several lawmakers, including Republican senators, retracting their support. The revised bill now includes more stringent provisions for stablecoin issuers and reinforced Anti-Money Laundering (AML) measures to address Democratic concerns. Despite these changes, ten senators, four of whom were initial supporters, argued that the revisions still lack vital AML and national security protections.
Can Bipartisan Amendments Secure Enough Support?
Since the May 8 vote, efforts have been underway to rejuvenate the stablecoin bill. Senator Hagerty conveyed optimism, suggesting ongoing negotiations between party representatives could lead to an agreement before Memorial Day. The updated version introduces new consumer protection measures and ethical guidelines, particularly limiting Big Tech’s involvement in stablecoin issuance.
The bill now restricts non-financial entities like Meta, Amazon, Google, and Microsoft from entering the stablecoin market unless they adhere to rigorous financial risk and consumer protection protocols. Additionally, the legislation ensures issuers avoid using misleading terms such as “United States” in their stablecoin names, addressing concerns about potential consumer confusion with government-backed tokens.
Furthermore, the amendments extend ethical oversight to include prominent figures like Elon Musk and government officials, reinforcing conflict of interest protocols. The Treasury Department’s enforcement capabilities also see enhancements, allowing for suspension of issuer registrations upon reckless conduct.
Despite these substantial updates, a memo from Democratic staff on the Senate Banking Committee indicates persistent reservations. The document criticizes the revised bill for masking critical deficiencies that jeopardize consumer protection and national security, warning of potential loopholes for entities like Tether and Big Tech.
Conclusion
As the US Senate prepares for another critical vote on the stablecoin legislation, the outcome remains uncertain. While bipartisan amendments aim to address previous concerns, the bill’s future hinges on whether these changes suffice to secure the necessary support.
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