- The Senate Banking Committee approved the GENIUS stablecoin bill with an 18-6 vote, which now awaits its fate in the Senate.
- The legislation aims to make stablecoins more accessible and reduce international crimes involving digital currencies.
- It mandates that all issued assets be backed one-to-one and sets various requirements for stablecoin providers.
- Despite its success in the committee, the bill faces opposition from individuals like Elizabeth Warren, who are wary of the potential power it could give to major tech companies.
The United States’ push toward purpose-built crypto regulation is taking another step forward, with the Senate Banking Committee passing new stablecoin legislation overnight.
The GENIUS bill passed with a vote of 18-6 (in favour), providing a drop of much-needed clarity among the industry.
The Senate Committee victory may prove a significant one for the digital asset sector’s adoption within the United States, as it gives a new air of legitimacy and trust to stablecoins tied to the US Dollar.
But now, the bill faces its toughest challenge yet – making its way through the Senate.
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Bill to Enforce 1:1 Reserves for All US-Issued Stablecoins
The primary voice behind the bill, Republican Bill Hagerty, included several important requirements for stablecoin operators to offer their services to US citizens. The goal here was to remove draconian financial limitations that currently affect tokenisation practices in the US, while ensuring customers are well-protected.
By making stablecoins more approachable locally, Hagerty and the bill’s supporters hope it will drive away international crime using pegged digital currencies.
Additionally, the bill requires all issued assets to be backed one-to-one.
Despite initially fearing stablecoins might undermine the US Dollar, Trump has done a 180 on this issue. It is the belief of his party, among others, that stablecoins will actually serve to bolster the USD – considering it will be backed by physical dollars, T-bills and other similar assets.
Bitcoin Strategic Reserve superfan, Senator Cynthia Lummis, chimed in on the bill’s success.
This is an innovative, important financial product that has safeguards built in.
Senator Cynthia LummisBill Faces Scrutiny From Warren, As Power Balance Could Become Unhinged
Despite the bill’s comprehensive victory in the Senate Banking Committee, not everyone is a fan of stablecoins permeating US finance.
It faces an uphill battle to get through the likes of Democrat Elizabeth Warren, one of the most outspoken opponents of cryptocurrency.
One of her key issues is the ability for big tech players like Musk and Zuckerberg to issue their own native digital assets, which could provide a workaround for making payments without a bank.
If these firms want to engage in payments, they must partner with, or facilitate transactions among, regulated financial institutions. But this stablecoin bill breaks that status quo by greenlighting Big Tech companies and other commercial conglomerates … to issue their own stablecoins, which is the functional equivalent of a bank deposit.
Senator Elizabeth Warren’s Office
In short, the power this bill may afford to big tech is a little on the concerning side, especially considering it may strip banks of funding. While this might not sound like such a bad idea, banks are key players in a global economy and play a major role in stimulating spending, borrowing and more.
However, with the right checks and balances in place, the stablecoin bill seems like it has a good chance of passing through the Senate.
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