The U.S. Senate is progressing with the GENIUS Act, a significant legislative effort aimed at regulating stablecoins with bipartisan support. The Act proposes a tiered regulatory framework where larger stablecoin issuers would fall under Federal Reserve oversight, while smaller issuers remain regulated at the state level, preserving market diversity. Key lawmakers, including Senators Bill Hagerty, Tim Scott, and John Thune, emphasize the importance of stablecoins within the crypto ecosystem for payments and financial innovation.
Amendments to the bill, introduced after an initial Senate setback, seek to prevent major Big Tech companies such as Meta, Amazon, and Google from issuing or holding stablecoins, citing concerns over mixing financial products with tech platforms. These amendments also enhance consumer data privacy, financial risk controls, and fair business practices. The Act restricts the use of U.S.-themed branding by stablecoins to avoid misleading associations with federal entities.
Enforcement authority would shift more centrally to the Treasury Department, reducing the roles of the SEC and CFTC, to enable swifter regulatory action against noncompliant issuers. Additionally, the Act addresses conflicts of interest by highlighting federal employees with potential ties to stablecoin activities, aiming to increase transparency.
This legislation could reshape the stablecoin landscape in the U.S., strengthening regulatory frameworks, impacting financial markets, and influencing future digital asset policies both domestically and internationally. However, the bill still faces negotiation over specific provisions, including stringent restrictions on Big Tech’s involvement in stablecoins.