In a pivotal moment for cryptocurrency legislation in the United States, Senators Bill Hagerty (R-TN) and Kirsten Gillibrand (D-NY) have announced the forthcoming debate on the Guiding and Establishing National Innovation for US stablecoins (GENIUS) Act.
This legislation aims to create a clear regulatory framework for payment stablecoins, which are digital assets pegged to the value of traditional currencies like the US dollar.
Stablecoins In Focus
Senator Hagerty expressed optimism about the bill, stating, “Next week, the Senate will make history when we debate and pass the GENIUS Act that establishes the first ever pro-growth regulatory framework for payment stablecoins.”
The Senator emphasized that the legislation would enhance the dominance of the US dollar, protect consumers, and drive demand for US treasuries, all while ensuring that the innovation in the digital asset sector remains under American control.
Senator Gillibrand echoed this sentiment, highlighting the importance of stablecoins in the global economy. “It is essential that the US enact legislation that protects consumers while also enabling responsible innovations,” she said.
The GENIUS Act is positioned as a bipartisan effort to provide regulatory clarity and robust consumer protection, thereby reaffirming the US dollar’s status in the digital economy. However, the path to passing the GENIUS Act has encountered significant hurdles.
Senate Vote On GENIUS Act Falls Short
On May 8, the Senate held a key vote where the bill required 60 votes to advance to the floor for final passage. Ultimately, the vote tally was 48 in favor and 49 against, with three senators not participating.
Following this setback, Treasury Secretary Scott Bessent criticized lawmakers for their inaction, declaring, “the world is watching while American lawmakers twiddle their thumbs.”
The bill’s challenges intensified when nine key Democrats, led by Senator Ruben Gallego (D-AZ), voiced their opposition, despite some having previously supported it in committee.
The dissenting group expressed concerns about various issues in the bill, particularly regarding anti-money laundering (AML) provisions, foreign issuers, and national security implications.
This coalition included prominent senators such as Mark Warner (VA), Raphael Warnock (GA), and Lisa Blunt Rochester (DE), who collectively stated, “While we are eager to continue working with our colleagues to address these issues, we would be unable to vote for cloture should the current version of the bill come to the floor.”
The GENIUS Act aims to establish a comprehensive regulatory framework that would govern the issuance and use of stablecoins, ensuring that they operate safely and transparently within the financial ecosystem.
Featured image from DALL-E, chart from TradingView.com
