Latest on the Updated GENIUS Act: A Federal Framework for Stablecoins
Senate bill on stablecoins potentially reunites for vote following disagreement linked to Trump and cryptocurrency
The U.S. Senate is gearing up to revisit the discussion on stablecoin regulation, with the GENIUS Act possibly hitting the floor as soon as Thursday. The updated bill aims to establish a federal framework for stablecoins, ensuring a clear-cut regulatory landscape for these digital assets.
Last week, the bill encounter a roadblock due to partisan squabbles over President Donald Trump's alleged connections to stablecoin issuer World Liberty Financial. However, the new bill seems to veer away from addressing these specific ties, according to recent reports by CoinDesk.
Senators Kirsten Gillibrand and Cynthia Lummis, the main sponsors of the bill, stress the need for focus on regulatory clarity rather than dwelling on political distractions. Gillibrand admits that while the bill does incorporate general ethics measures, it is not primarily an ethics bill.
Meanwhile, the House is also progressing with a separate stablecoin bill. A consensus between both chambers could mark a significant shift in the U.S.'s approach to digital dollar regulation.
A Refresher on the GENIUS Act
The GENIUS Act has been designed to provide a robust federal framework for stablecoin issuers. Key provisions include allowing issuers with less than $10 billion in outstanding stablecoins to operate under state regulation, while those surpassing this threshold must transition to a federal regulatory framework[2][4].
In case of nonbank issuers, the federal framework would be administered by state regulators, whereas depository institution subsidiaries would be jointly regulated by federal banking agencies and state regulators[2].
Hurdles Overcome, Hurdles Ahead
The previous versions of the GENIUS Act or similar legislation might have faced challenges due to differing regulatory thresholds and oversight mechanisms, lack of support from key stakeholders, and the dynamics of the Congressional process[2]. The current version aims to overcome these obstacles by presenting a more streamlined and comprehensive regulatory environment for stablecoins in the U.S.[5].
[1] Consumer groups and industry players back GENIUS Act for its consumer protection and transparency measures.[2] Differences in regulatory thresholds and oversight mechanisms caused debates in past versions of the GENIUS Act.[3] The STABLE Act allows state-authorized issuers to remain under state supervision indefinitely.[4] Regulatory thresholds for stablecoin issuers varying among bills could have affected their advancement.[5] The current version of the GENIUS Act is moving forward to create a more streamlined and comprehensive regulatory environment for stablecoins in the U.S.
- The updated GENIUS Act proposes a federal framework for stablecoin issuers, allowing those with less than $10 billion in outstanding stablecoins to operate under state regulation, while larger issuers must transition to a federal regulatory framework.
- Nonbank stablecoin issuers would be administered by state regulators under the federal framework, while depository institution subsidiaries would be jointly regulated by federal banking agencies and state regulators.
- Previous versions of the GENIUS Act or similar legislation faced challenges due to differing regulatory thresholds and oversight mechanisms, lack of support from key stakeholders, and the dynamics of the Congressional process.
- The current version of the GENIUS Act aims to overcome these obstacles by presenting a more streamlined and comprehensive regulatory environment for stablecoins in the U.S., gaining support from consumer groups and industry players due to its consumer protection and transparency measures.
