The United States is actively progressing with cryptocurrency regulations, a move that has been long overdue. After the collapse of FTX in 2022, the Biden administration emphasized the necessity for immediate regulatory measures in the crypto space. Despite encountering opposition primarily from the Republican side, the proposed cryptocurrency legislation is nearing approval, marking a pivotal development.
What’s in the US Cryptocurrency Legislation?
The centerpiece of the new US Senate regulations on stablecoins is the GENIUS Act. Meanwhile, the House of Representatives has also been advancing similar initiatives, recently passing the National Innovation Steering and Establishment Act, dubbed GENIUS, with a decisive 68-30 vote. Senate Banking Committee Chairman Tim Scott hailed this legislative action as a critical win for both innovation and America’s strategic interests.
How Does the GENIUS Act Shape the Crypto Market?
The GENIUS Act stipulates that stablecoins must be fully backed by US dollars or other liquid assets to prevent incidents similar to previous unbacked issuances. It also mandates annual audits for stablecoin issuers whose market capitalization exceeds $50 billion, impacting entities like Tether. Although Tether is not based in the US, these mandatory audits are expected to foster greater trust in cryptocurrencies.
The legislative journey is steadily advancing towards a concluding vote. Former President Trump had previously expressed a desire to have the crypto bill finalized by August. Expedited debates are paving the way for this goal, setting up the final steps early next week.
Simultaneously, the House is making strides with the STABLE stablecoin act, which cleared committee hurdles in May with a 32-17 vote. This legislation now awaits a full House vote. Both GENIUS and STABLE must advance together, merging through a conciliation committee to form a cohesive legislative framework.
The bipartisan cooperation that emerged in the Senate offers optimism for similar dynamics in the House. If this progress continues, the final legislative package could be placed before Trump by August.
– The GENIUS Act mandates comprehensive backing of stablecoins.
– Annual audits are required for issuers with significant market value.
– Bipartisan cooperation suggests broad legislative support.
The momentum behind these efforts underscores the US government’s resolve to establish a robust regulatory environment for cryptocurrencies, potentially reshaping the digital asset landscape and enhancing financial security.
