🗳️ The GENIUS Act on Stablecoin Regulation

A proposed bipartisan U.S. Senate bill aiming to establish a federal regulatory framework for stablecoins, a type of cryptocurrency pegged to a stable asset like the U.S. dollar. The bill seeks to protect consumers by requiring strict reserve backing and transparency for stablecoin issuers and preventing misleading marketing. While it advanced from committee with initial support, it faced a setback on the Senate floor, partly due to concerns over national security, anti-money laundering provisions, and potential conflicts of interest related to the Trump family's involvement in crypto ventures. The act also faces potential challenges due to its approach to foreign stablecoin issuers and its potential impacts on decentralized finance.

The GENIUS Act is not the only stablecoin bill proposed. Competing legislation includes the House's STABLE Act (discussion draft) and FIT21, among others. The STABLE Act shares common goals but differs, for example, by imposing a two-year moratorium on algorithmic stablecoins instead of requiring a study. Maxine Waters' bill proposes a stricter federal-only approach and explicitly bars big tech companies from issuing stablecoins. FIT21, passed by the House but referred to the Senate Banking Committee, focuses on dividing digital asset oversight between the SEC and CFTC. The failure of the GENIUS Act to advance means legislative work is not yet complete, and discussions for potential changes and compromises are ongoing.