GENIUS Act Enters Amendment Phase Amid Senate Approval

The GENIUS Act received Senate Banking Committee approval, advancing to the amendment phase, impacting stablecoin regulations in the United States.

This advancement represents significant implications for stablecoin issuance, impacting financial markets and introducing stricter regulations.

Senate Approval Advances GENIUS Act to Amendment Phase

The GENIUS Act progresses in the US Senate, moving to the amendment phase after an 18-6 vote. The Act targets stablecoin regulation by ensuring 1:1 backing with liquid reserves. Key political players involve the Senate Banking Committee, President Trump, and Rep. French Hill, who support stablecoin frameworks. Senate Banking Committee members noted, “Ultimately, whether the GENIUS Act becomes law, and in what form, could redefine the future of finance in America. The regulatory framework offers the promise of clarity and the peril of loopholes alike, as well as the challenge of reconciling innovation with oversight.” source.

Stablecoin Issuers Face New Compliance Challenges

Immediate effects include potential operational risk changes for stablecoin issuers and an impact on market liquidity. USDC and USDT align with new federal compliance standards. The Act could affect institutional participation and future liquidity dynamics in the stablecoin market. It influences both financial and regulatory sectors, affecting investor confidence.

GENIUS Act vs. EU’s MiCA: A Regulatory Comparison

Compared to the EU’s MiCA regulations, the GENIUS Act marks a first comprehensive federal attempt to regulate stablecoins in the US. Past interventions like SEC actions have shown significant market impacts. Potential outcomes include affected issuance practices and stablecoin operations, altering liquidity patterns and compliance efforts. Historical trends suggest a need for balancing innovation and regulatory oversight.

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