Senate Advances Crypto Regulation with GENIUS Act
In a landmark move for cryptocurrency governance, the Senate has passed the GENIUS Act, a pivotal legislative measure establishing the first federal standards for stablecoins. Garnering a 68-30 vote, this bill paves a regulated path for private entities to issue digital currencies under the vigilance of the federal government.
The Dawn of a New Era in US Stablecoin Oversight
The GENIUS Act represents a monumental triumph for the digital asset industry, which invested around $250 million in the 2024 election cycle to back what is now seen as the most crypto-friendly Congress in the history of the United States. Although the bill has cleared the Senate, it now faces potential hurdles in the Republican-dominated House, where a different stablecoin proposal, the STABLE Act, is also being reviewed.
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Despite these challenges, the Senate’s endorsement marks a significant evolution not only for the technology but also for the political clout it commands. Officially named the Guiding and Establishing National Innovation for US Stablecoins Act, the GENIUS Act provides vital regulatory frameworks for the stablecoin sector. Key provisions include mandates for full reserve backing, monthly audits, and adherence to anti-money laundering statutes. Furthermore, the act facilitates a broader spectrum of issuers, such as banks, fintech firms, and large retailers, to develop their own stablecoins or incorporate them into current payment infrastructures.
The Importance of Bipartisan Collaboration
Treasury Secretary Scott Bessent, who will play a crucial role in the regulation under the new law, conveyed during a Senate appropriations session that the US stablecoin market has the potential to expand nearly eightfold, potentially surpassing $2 trillion in the near future.
Initially perceived as one of the more straightforward crypto-related bills to pass, the GENIUS Act encountered unexpected delays and obstacles, including an earlier failure to reach the Senate floor. Senator Cynthia Lummis of Wyoming expressed her astonishment at the complexities involved, stating, “I had no idea how hard this was going to be.” Senator Bill Hagerty from Tennessee also noted the intricacies of securing bipartisan support, especially from the 18 Senate Democrats who ultimately voted in favor of the bill.
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