Expediting Vote on Pivotal Cryptocurrency Legislation Led by Senate Majority Leader
Rewritten Article:
Title: The GENIUS Act: Navigating the Tides of Congress and the Stablecoin Spectacle
In Brief:
- The GENIUS Act intends to create a comprehensive regulatory framework for stablecoins in the U.S.
- The bill has encountered criticism regarding potential impacts on traditional banking.
- It stands apart from the House’s STABLE Act, differing in regulatory approach and reserve assets.
In Depth:
Senate Majority Leader John Thune (R-SD) sparked a whirl of activity on Capitol Hill last week, setting the stage for a swift vote on the GENIUS Act – the first-ever regulatory framework for U.S. stablecoins. The bill, sponsored by Senator Bill Hagerty and co-sponsored by Senators Tim Scott (R-SC) and Cynthia Lummis (R-WY), is backed by Senator Thune and aims to conform to the "mandate" of President Donald Trump and the American people to establish a regulatory framework for digital assets.
In a recent statement, Scott emphasized the GENIUS Act as a vital initial step to set industry expectations and reinforce U.S. dollar dominance in the global financial market. The legislation garnered bipartisan approval in the Senate Banking Committee, passing by a margin of 18 to 6, and is expected to reach a floor vote by the end of April. Senate Hagerty anticipates a smooth journey for the bill, given its strong support.
However, the GENIUS Act faces a storm of opposition from traditional banking advocates, who perceive it as a threat to the existing financial system. Arthur Wilmarth, Professor Emeritus of Law at The George Washington University, deems the bill as flawed and potentially hazardous for consumers and the broader financial landscape. Wilmarth contends that non-bank stablecoin issuers could undercut FDIC-insured banks by offering "shadow deposits," causing tension within the traditional banking ecosystem.
The professor has also voiced concerns that the GENIUS Act could pave the way for Big Tech and other commercial enterprises to acquire non-bank stablecoin issuers and infiltrate the banking sector. Notably, the bill allows money market funds to be used as reserves, contrary to the House's STABLE Bill, which is more restrictive, and it also takes a contrasting approach with STABLE regarding algorithmic stablecoins, merely requiring a brief study, while the STABLE Act imposes a two-year moratorium.
As the GENIUS Act works its way through Congress, it remains uncertain whether it will attract the necessary support to pass. Recent defections from Democratic senators have cast shadows on the bill's future, as noted in a recent report. However, with the Trump administration seeking to have both the GENIUS Act and the STABLE Act signed before Congress's August recess, the race for a comprehensive regulatory framework for stablecoins has taken center stage in the U.S. political landscape.
Last week, Decrypt exclusively reported that Coinbase, the most prominent crypto firm in the U.S., has allegedly been attempting to prevent both the GENIUS Act and the STABLE Act from reaching the floor votes. Insiders suggest that tech venture capital firm Andreessen Horowitz has lent a sympathetic ear to the delay of stablecoin legislation, aiding Coinbase in its efforts.
Related Articles:- Senate braces for Genius Act as President Trump bolsters crypto growth- Coinbase reportedly stalling the passage of both the STABLE and GENIUS Acts
Editors Note: This article is subject to the evolving circumstances surrounding the GENIUS Act's progression through Congress. Information presented here is accurate as of May 2025.
Sources
Original Article Found Here: https://decrypt.co/58450/genius-act-advancing-seeks-to-regulate-stablecoins-in-us
(This article was generated using AI and should not be considered as a direct source for the associated news story)
- The GENIUS Act, proposed to create a regulatory framework for stablecoins in the U.S., is the first of its kind, aiming to follow the "mandate" of President Donald Trump for digital asset regulation.
- Senator John Thune, the bill's supporter, anticipates a swift vote on the GENIUS Act, with bipartisan approval already secured in the Senate Banking Committee.
- Senators Tim Scott, Cynthia Lummis, and Bill Hagerty are the bill's sponsors, with Scott emphasizing the importance of the GENIUS Act in setting industry expectations and maintaining U.S. dollar dominance in global finance.
- The GENIUS Act faces opposition from traditional banking advocates, who view it as a potential threat to the existing financial system, with Arthur Wilmarth, a professor at The George Washington University, expressing concerns about its impact on consumers and the broader financial landscape.
- Wilmarth argues that non-bank stablecoin issuers could offer "shadow deposits," causing tension within the traditional banking ecosystem, and potentially allowing Big Tech and other commercial enterprises to invade the banking sector through the acquisition of non-bank stablecoin issuers.
- The bill's use of money market funds as reserves, instead of the more restrictive approach of the House's STABLE Bill, and its contrasting views on algorithmic stablecoins, have also sparked debate.
- The GENIUS Act's future remains uncertain, with recent defections from Democratic senators casting doubts on its success, but the Trump administration aims to have both the GENIUS Act and the STABLE Act signed before Congress's August recess.
- According to a recent report, Coinbase, a prominent U.S. crypto firm, allegedly tries to prevent both the GENIUS Act and the STABLE Act from reaching the floor votes, with tech venture capital firm Andreessen Horowitz reportedly aiding in these efforts.
