GENIUS Act: US Stablecoin Regulation Update
GENIUS Act: A Pivotal Vote for US Stablecoin Regulation
The Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act) is on the verge of a critical vote in the US Senate. This legislation holds significant implications for the cryptocurrency industry and the future of digital finance.
Following a 68-30 cloture vote on June 11th, the bill is moving closer to a final Senate vote. If passed, it would then proceed to the House of Representatives for further consideration. This represents a potential major victory for the crypto industry and the current administration, which supports the bill.
Industry Reactions: Hope and Concerns
While Coinbase's Chief Legal Officer expressed optimism about the potential for regulatory clarity, concerns remain. Senator Elizabeth Warren voiced strong opposition, citing worries about potential self-dealing and misuse linked to specific crypto businesses.
Proposed amendments aim to address conflict-of-interest concerns by preventing elected officials and their families from issuing stablecoins. This is one of the key proposed amendments.
Impact on the US Dollar and Global Finance
Passage of the GENIUS Act could significantly impact the US dollar’s role in the digital economy. Industry experts suggest it could solidify the dollar's dominance, creating a more structured global financial framework. The bill's framework for stablecoin oversight, including 1:1 backing, regular audits, and AML compliance, could also impact the direction of programmable money regulation.
Bridging TradFi and Blockchain
The GENIUS Act proposes a system for stablecoin issuers to register with the US government. This is viewed by some as a positive step towards bridging traditional finance (TradFi) and blockchain technology. According to Roshan Robert, CEO of OKX US, this approach could facilitate innovation in blockchain-powered payments and settlements.
A New Rulebook for Global Finance?
Mike Cahill, CEO of Douro Labs, suggests that the Act could set a precedent for the regulation of decentralized, programmable money, potentially influencing the future of central bank digital currencies (CBDCs). Successful implementation in the US, he argues, could establish a “rulebook for the next global financial system.”
Countering De-Dollarization
The GENIUS Act is seen by some as a response to growing discussions about de-dollarization. With the majority of stablecoins pegged to the US dollar (USDT and USDC account for 86.4% of the market cap), the bill could strengthen the dollar's position in a digital financial landscape.
Bill Sebell, executive director of XDC Foundation, highlights that dollar-backed stablecoins are increasingly relevant and influential in a digital age, particularly if the GENIUS Act is passed.
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