Stablecoin regulatory bill receives green light during Banking Committee hearing
- The Senate Banking Committee has advanced the GENIUS Act following a vote on Thursday.
- The bill will be passed to the Senate for a floor vote, after which the President can sign it into law.
- The GENIUS Act seeks to provide a clear regulatory framework for stablecoin payments in the US.
The US Senate Banking Committee voted on Thursday to advance the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, which aims to establish proper regulations for stablecoin payments in the country. After receiving approval from the Committee, the bill will be presented to the Senate for a floor vote. If it passes, it will then be sent to the President.
Senate Banking Committee approves GENIUS Act, floor vote set to follow
Members of the Senate Banking Committee moved to advance the GENIUS Act in a bipartisan vote of 18-6.
The bill will be passed to the Senate for a full floor vote within President Donald Trump's first 100 days in office, according to a statement from Senator Bill Hagerty.
Once approved at the Senate level, it will be taken to President Trump for an official signing into law. This would make it the first stablecoin regulatory bill in the United States to be signed into law.
"Today's historic passage of the GENIUS Act – the first digital assets legislation to advance in the Senate – is a step forward in ensuring stablecoins are safe and reliable tools in the financial system," Banking Committee chairman Tim Scott shared in a statement.
The GENIUS Act, introduced by Senator Hagerty in February, seeks to establish clear guidelines for stablecoin payments in the US. Hagerty announced an update to the bill on Monday, with help from Senators Tim Scott, Cynthia Lummis, Kirsten Gillibrand and Angela Alsobrooks.
The updates were made to adjust specific areas in the bill, including regulatory requirements for foreign stablecoin issuers. The Committee also made several amendments to the bill before it passed out of the hearing, according to Fox Business's Eleanor Terrett.
These amendments include the obligation for regulators to confirm the competence of key leaders at a company applying to launch stablecoin services.
Others include amendments to clarify reserve requirement and to give stablecoin customers higher priority than creditors in any case of bankruptcy.
Several Democrats also acknowledged the need for the bill and showed support for its advancement.
However, Senator Elizabeth Warren, known for her strong criticism of crypto, proposed amendments to the bill. Warren, along with some Senate Democrats, pointed out that the regulations could become a breeding ground for illegal financial activities.
"It would be crazy to advance this bill when it's got so many holes in it that have been pointed out, and to advance it at the exact moment that news is breaking about Donald Trump trying to create his own stablecoin with an outfit that is notorious for breaking the law," Warren said during the hearing.
Warren's statement aligned with The Wall Street Journal and Bloomberg reports, stating that Donald Trump's family representatives are seeking to invest in Binance US and explore a partnership that involves creating a US Dollar-backed stablecoin. However, on Thursday, Binance founder Changpeng Zhao refuted the claims via an X post.
She also claimed the bill could fall short in protecting consumer funds held in stablecoins. Despite Senator Warren's concerns for the GENIUS Act, Republicans overturned her amendments.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
Author
Michael Ebiekutan
FXStreet
With a deep passion for web3 technology, he's collaborated with industry-leading brands like Mara, ITAK, and FXStreet in delivering groundbreaking reports on web3's transformative potential across diverse sectors. In addi
