On June 17, 2025, the GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins) will face a decisive vote in the US Senate and could fundamentally change the regulation of stablecoins in the USA. This legislation marks a milestone for the crypto industry by establishing a comprehensive, nationwide regulatory framework for stablecoins for the first time.
Core Points of the GENIUS Act
- Full Coverage by Liquid Assets: Issuers of stablecoins must fully back their digital assets with liquid and secure assets such as US Treasury bonds to strengthen investor trust.
- Strict Anti-Money Laundering Regulations: The legislation requires issuers to comply with stringent regulations to combat money laundering and terrorist financing.
- Prioritization of Repayment in Bankruptcy: Investors must be preferentially repaid in case of bankruptcy.
- Prohibition for Tech Giants: Technology companies like Meta or Google are prohibited from issuing their own stablecoins.
- Regular Security Audits: Issuers are required to conduct regular security audits.
Political Dynamics and Challenges
The passage of the GENIUS Act was initially jeopardized as some Democratic senators expressed concerns over potential conflicts of interest. Nevertheless, the bill found bipartisan support and was passed by a majority of 66 to 32 votes.
Senator Mark Warner emphasized the need for a clear regulatory framework and warned that otherwise, other countries might set standards that do not align with American interests.
Significance for Investors
For investors, the GENIUS Act represents a significant improvement in the level of protection:
- Increased Transparency: The requirement for full coverage reduces the risk of loss in value.
- Lower Fraud Risk: Strict compliance mandates make criminal activities more difficult.
- Market Stability: The prohibition for large tech companies as issuers promotes competition and diversity.
The upcoming vote could therefore represent a turning point for the acceptance and stability of stablecoins worldwide.