tl;dr
Senate Majority Leader John Thune is pushing to fast-track the GENIUS Act, the first U.S. regulatory framework for stablecoins pegged to the dollar. Sponsored by Senator Bill Hagerty and co-sponsored by Senators Tim Scott and Cynthia Lummis, the bill aims to regulate stablecoins and reinforce U.S. d...
Senate Majority Leader John Thune is pushing to fast-track the GENIUS Act, the first U.S. regulatory framework for stablecoins pegged to the dollar.
Sponsored by Senator Bill Hagerty and co-sponsored by Senators Tim Scott and Cynthia Lummis, the bill aims to regulate stablecoins and reinforce U.S. dollar dominance in global finance.
The legislation passed committee in March, with a full Senate vote expected by the end of April.
However, the bill faces opposition from traditional banking advocates who warn it could undermine banks by allowing nonbank stablecoin issuers to offer "shadow deposits" and enable Big Tech to enter banking.
Arthur Wilmarth, a law professor, criticizes the bill as "deeply flawed" and dangerous to consumers and the financial system.
Concerns focus on nonbank stablecoin issuers potentially competing with FDIC-insured banks and disrupting the traditional banking industry.
The Senate's GENIUS Act also differs from the House's STABLE Bill in key areas:
- Money market funds are allowed as reserves under GENIUS but more restricted under STABLE.
- Both bills provide a $10 billion threshold but adopt different approaches.
- Algorithmic stablecoins face a two-year moratorium under STABLE, while GENIUS requires only a brief study.
The Trump administration aims to pass both bills before Congress’s August recess.
Meanwhile, Coinbase, the largest U.S. crypto firm, reportedly works to delay the bills’ floor votes with support from venture firm Andreessen Horowitz.
This opposition seeks to influence the legislative timeline amid concerns about the regulation's impact on the crypto industry and traditional finance.