In a pivotal move for cryptocurrency regulation, the U.S. Senate approved the GENIUS Act with a 51-23 vote, marking a significant shift in how stablecoins will be governed in the country. The GENIUS Act, which stands for Guiding and Establishing National Innovation for U.S. Stablecoins, aims to ensure that stablecoins are backed by real assets such as U.S. dollars. This legislation also imposes stricter controls on large issuers, especially those with a market capitalization exceeding $50 billion, mandating annual audits for compliance.
Under the new rules, major tech companies like Meta and Amazon will face issuance limits unless they adhere to stringent financial and privacy requirements. This is designed to mitigate the risks associated with large firms potentially monopolizing the digital currency sphere. In addition, stablecoin users will receive enhanced legal protections, particularly in instances where an issuer faces bankruptcy, thanks to a measure called super-priority status which prioritizes user recovery.
The passage of this bill signifies the first substantial legislative step toward crypto regulation by Congress after prior stalled efforts. With the support of the Trump administration, this act is part of a broader push for the U.S. to take the lead in digital finance innovation. Moving forward, the House of Representatives will have to review the legislation. They might either introduce their own bill or endorse the GENIUS Act, with a deadline set for August when a final decision is anticipated. As the stablecoin market is projected to grow to $3.7 trillion by the end of the decade, stakeholders are keeping a close watch on the House’s actions.
Under the new rules, major tech companies like Meta and Amazon will face issuance limits unless they adhere to stringent financial and privacy requirements. This is designed to mitigate the risks associated with large firms potentially monopolizing the digital currency sphere. In addition, stablecoin users will receive enhanced legal protections, particularly in instances where an issuer faces bankruptcy, thanks to a measure called super-priority status which prioritizes user recovery.
The passage of this bill signifies the first substantial legislative step toward crypto regulation by Congress after prior stalled efforts. With the support of the Trump administration, this act is part of a broader push for the U.S. to take the lead in digital finance innovation. Moving forward, the House of Representatives will have to review the legislation. They might either introduce their own bill or endorse the GENIUS Act, with a deadline set for August when a final decision is anticipated. As the stablecoin market is projected to grow to $3.7 trillion by the end of the decade, stakeholders are keeping a close watch on the House’s actions.
