#GENIUSActPass The GENIUS Act has passed the US Senate with a vote of 68-30, marking a significant step towards establishing a federal regulatory framework for stablecoins. Introduced by Senator Bill Hagerty and co-sponsored by Senators Tim Scott, Kirsten Gillibrand, and Cynthia Lummis, the bill aims to protect consumers and promote innovation in the digital asset space.
*Key Provisions:*
- *Reserve Requirements*: Stablecoin issuers must maintain 1:1 backing with US dollars or highly liquid short-term assets like Treasury bills.
- *Transparency and Disclosure*: Monthly attestations and public disclosures are required to ensure solvency and consumer protection.
- *Federal and State Oversight*: Issuers with over $10 billion in market capitalization will fall under federal supervision, while smaller issuers can opt for state-based regulation.
- *Ban on Yield-Generating Stablecoins*: The bill prohibits stablecoins that might compete with traditional deposits.
- *Restrictions on Foreign Stablecoins*: Foreign-issued stablecoins will face stricter regulations in the US market.
*Next Steps:*
- The bill will now move to the House of Representatives, where it may be reconciled with the STABLE Act.
- If passed, the GENIUS Act will establish a clear regulatory framework for stablecoins, potentially driving growth in the market and increasing demand for US Treasuries.¹ ²
*Impact:*
- The GENIUS Act could revolutionize the American stablecoin industry, strengthening the competitive position of the US in the global crypto market.
- Analysts predict purchases of $1.6 trillion in US Treasuries over four years, consolidating the dollar's dominance in digital finance.³