GENIUS Act Passes, Establishes Regulatory Framework For Stablecoins
Trump has signed the long-awaited GENIUS Act into law, establishing a US regulatory framework for stablecoins
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- Written by Banking Exchange staff
US President Donald Trump signed the GENIUS Act into law on Friday, marking the country’s first major cryptocurrency legislation and the first of three long-awaited acts concerning the digital assets industry.
The legislation sets up a regulatory regime for stablecoins. Key changes include:
- Only permitted issuers, regulated at either the state or federal level, may issue a payment stablecoin in the US
- These permitted issuers must maintain reserves backing the stablecoin one-for-one with US dollars or another similarly liquid asset, such as short-term Treasuries
- They must publicly disclose their redemption policies and publish details of their reserves monthly
Issuers will also be required to comply with anti-money laundering laws.
The GENIUS Act is just the first of a suite of three crypto-related bills making their way through Congress, promising to strengthen regulation around digital assets and bring them into the mainstream. The two other bills have passed the House and are headed to the Senate. They have the public support of Trump and so, if they pass the Senate, are expected to become law.
The first of these bills, the CLARITY Act, aims to set up a regulatory framework for other forms of digital assets by determining the threshold at which these assets become a security. It would sort different types of digital assets into categories to deem whether they are to be regulated by the Securities and Exchange Commission or the Commodity Futures Trading Commission. Most are expected to fall into the latter category.
The final crypto-related act, the Anti-CBDC Surveillance State Act, would prevent the Federal Reserve from establishing its own digital currency. Federal Reserve officials have insisted that the central bank has not been close to developing such a currency, but the legislation is pre-emptive due to concerns about the risk that a Federal Reserve digital token could enable the central bank to monitor Americans’ transactions.
https://www.congress.gov/bill/119th-congress/senate-bill/394
https://www.congress.gov/bill/118th-congress/house-bill/5403/text
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