The GENIUS Act has cleared its first major hurdle in the US Senate, passing with a substantial majority of 68 to 30 votes. This legislation establishes, for the first time, a federal regulatory framework for stablecoins, digital currencies pegged to the US dollar.
Key Provisions of the GENIUS Act
- Requirement for stablecoin issuers to fully back their tokens with US dollars.
- Monthly disclosure obligations and regular audits of reserves.
- Prohibition of algorithmic stablecoins.
- Strict limits on the reuse and mixing of reserves.
- Clarification that compliant stablecoins are not securities and not subject to SEC oversight.
This regulation aims to bring more security and transparency to the stablecoin market. The legislation received bipartisan support, backed by senators such as Bill Hagerty and others. Critics like Senator Elizabeth Warren opposed the bill, arguing it does not provide sufficient protection against corruption.
Impact on the Crypto Market
The passage of the GENIUS Act led to a jump in stock prices for major crypto firms such as Circle Internet Group and Coinbase. This development is significant for investors, as it creates more regulatory clarity and strengthens confidence in cryptocurrency investments.
The bill still needs to be addressed by the US House of Representatives, where the STABLE Act is being worked on concurrently. Observers see the GENIUS Act as an important first step towards more comprehensive regulation of the cryptocurrency sector in the USA.
In summary, the success of the GENIUS Act in the Senate marks a milestone for the regulation of stablecoins in the USA, with positive signals for investors in the crypto space due to increased legal certainty and clear rules for market participants.