Hustle Through the GENIUS Act: US Stablecoins Regulation Up for Grabs
The Lowdown
Expediting Vote on Pioneering Stablecoin Legislation in the Senate
Senate Majority Leader John Thune has kickstarted the 'ole political dance floor with a push for a quick vote on the GENIUS Act, a law to regulate U.S. stablecoins. Co-sponsored by Bill Hagerty, Tim Scott, and Cynthia Lummis, this baby's aiming to provide a regulatory framework for digital assets currencies tied to the almighty greenback.
According to Senate Republican chair Scott, this congressional saunter is a vital first step in fulfilling Donald Trump's mandate to craft a regulatory system for digital assets. The GENIUS Act had already rolled through committee back in March, and Senator Hagerty expects a Senate floor vote before April wraps up.
Beyond Stablecoins
The GENIUS Act's ambition doesn't stop at stablecoins - it's about securing the U.S. dollar's place on the global financial stage. But the bill ain't been welcomed with open arms - traditional bankers ain't too pleased.
Arthur Wilmarth, Professor Emeritus of Law at The George Washington University, has labeled the GENIUS Act "deeply flawed," claiming it poses grave dangers to consumers and the financial system at large. He reckons non-bank stablecoin issuers could compete with FDIC-insured banks by offering "shadow deposits," potentially shaking the foundation of the traditional banking structure.
Wilmarth's also concerned the bill might give Big Tech and other commercial enterprises the green light to acquire non-bank stablecoin issuers and sneak into the banking sector, all thanks to their stablecoins.
On the House's Turf
The Senate's GENIUS Act ain't the only stablecoin bill in town: the House's STABLE Act is also in the running, but it's currently languishing, with no recent action reported. The STABLE Act sticks to stricter federal oversight, requiring state standards to meet or exceed federal rules.
So, there you have it - the GENIUS Act's on the move, but there's plenty of pushback from the banking world and other naysayers. Stay tuned as this congressional dance-off unfolds.
-Enrichment Data:
The U.S. is currently advancing two major stablecoin regulatory proposals: the Senate’s GENIUS Act (moving toward a floor vote) and the House’s STABLE Act (pending). Below are their key differences and current statuses:
Current Status- GENIUS Act: Senate Majority Leader John Thune has expedited the bill for a floor vote as of May 1, 2025[1][2][5]. It aims to establish a federal framework for stablecoins, focusing on licensing, reserve requirements, and state-federal regulatory coordination[1][4].- STABLE Act: Remains pending in Congress, with no recent action reported in the provided results. It proposes stricter federal oversight, requiring state standards to “meet or exceed” federal rules.
Key Differences| Aspect | GENIUS Act | STABLE Act ||--------------------------|--------------------------------------------------------------------------------|--------------------------------------------------------------------------------|| Federal vs. State Rules | Allows state regulation for issuers under $10B; federal oversight above[1][4]. | Mandates state standards must "meet or exceed" federal rules. || Regulatory Threshold | Applies Fed/OCC rules to issuers above $10B; light-touch for smaller issuers[1][4]. | No specific threshold mentioned; emphasizes uniform federal standards. || Reserve Requirements | Implements tailored reserve rules, including asset composition and liquidity[3][4]. | Likely similar but details unspecified in available sources. || Licensing | Dual state/federal licensing paths with waivers for large issuers[1][4]. | Prioritizes federal oversight with state subordination. || Focus | Promotes innovation, dollar dominance, and financial inclusion[1][5]. | Emphasizes consumer protection and systemic risk reduction[3]. |
Additional GENIUS Act Details- Definition: Explicitly defines payment stablecoins as digital assets pegged to a fixed monetary value[1].- Enforcement: Establishes supervisory and examination regimes with clear limits on regulatory overreach[1][4].- Bipartisan Support: Backed by Senators Hagerty, Scott, and Lummis as part of broader crypto regulatory efforts[5][1].
The GENIUS Act’s progress reflects a shift toward accommodating stablecoin innovation while the STABLE Act represents a more cautionary approach[5].
- The GENIUS Act, a legislation aiming to provide a regulatory framework for digital assets currencies tied to the U.S. dollar, is currently under consideration in the Senate.
- Co-sponsored by Bill Hagerty, Tim Scott, and Cynthia Lummis, the bill targets establishing a federal framework for stablecoins with a focus on licensing, reserve requirements, and state-federal regulatory coordination.
- Arthur Wilmarth, Professor Emeritus of Law at The George Washington University, has labeled the GENIUS Act "deeply flawed," alleging it poses risks to consumers and the financial system.
- He advocates that non-bank stablecoin issuers could compete with FDIC-insured banks by offering 'shadow deposits,' which he believes could shake the foundation of the traditional banking structure.
- Wilmarth is also concerned that the bill might give Big Tech and other commercial enterprises the opportunity to acquire non-bank stablecoin issuers and infiltrate the banking sector.
- Despite the criticism, Senate Majority Leader John Thune has expedited the bill for a floor vote as of May 1, 2025.
- The House is also considering the STABLE Act, which remains pending in Congress, with no recent action reported. The STABLE Act proposes stricter federal oversight, requiring state standards to "meet or exceed" federal rules.
- The U.S. is currently advancing two major stablecoin regulatory proposals: the Senate’s GENIUS Act and the House’s STABLE Act, with the GENIUS Act demonstrating a shift towards accommodating stablecoin innovation while the STABLE Act represents a more cautionary approach.
