Introduction to the Genius Act
The proposed “Genius Act” (Guiding and Establishing National Innovation for US Stablecoins) is a legislative draft that aims to create a comprehensive federal regulatory framework for stablecoins in the USA. Stablecoins are digital currencies pegged to an asset such as the US dollar, which stabilizes their value.
Central Contents of the Genius Act
- Reserve Requirements: Issuers of stablecoins must fully back their digital assets with liquid and secure assets such as US Treasury bonds or fiat currency.
- Transparency and Disclosure: Regular disclosures about the composition of reserves and their auditing by independent third parties are mandatory.
- Anti-Money Laundering Regulations: Strict requirements for combating money laundering and terrorist financing will be introduced.
- Investor Protection in Case of Insolvency: In the event of insolvency, investors will be prioritized in repayment.
- Preventing Market Concentration: Large technology companies are excluded from issuing their own stablecoins to prevent excessive market power.
Impact on the Crypto Boom
Risks
- Regulatory Hurdles: New regulations may burden smaller providers and increase compliance costs.
- Market Cleanup: Less trustworthy projects may disappear from the market.
- Innovation Obstacles: Stricter rules may hinder innovation.
Opportunities
- Increased Trust in the Market: Clear regulations enhance investor confidence.
- Institutional Acceptance: The likelihood of institutional investors entering the market increases.
- Stability and Security: Full backing reduces the risk of project collapses.
Conclusion
The Genius Act marks a turning point for the crypto market: more safety and transparency for investors with stricter rules for issuers. For long-term oriented investors, this appears positive, as trust in stable crypto economies is enhanced.