Senate Republicans are preparing to vote on stablecoin legislation before Memorial Day to establish new regulatory frameworks. Majority Leader John Thune privately confirmed the Senate’s plan to address stablecoin rules before the May 26 recess. The GENIUS Act, which proposes limits on stablecoin issuers, remains the central bill under consideration.
GENIUS Act Targets Permitted Stablecoin Issuers
In February, Senator Bill Hagerty introduced the GENIUS Act to define the legal parameters for issuing payment stablecoins in the US. The GENIUS Act successfully cleared the Senate Banking Committee in March before it advances to a full Senate vote. Lawmakers hasten their efforts to advance the bill since regulatory uncertainties keep intensifying.
The GENIUS Act proposes that only approved entities classified as “permitted payment stablecoin issuers” can legally issue such coins. The proposed law will stop non-permitted entities from issuing dollar-stable cryptocurrencies. The bill aims to centralize control and limit risks in the stablecoin sector.
Although the GENIUS Act does not ban stablecoins entirely, it tightens oversight and prevents unregulated entities from entering the space. Republican lawmakers support this financial regulation because it maintains stability and preserves innovation. According to this bill, legislators plan to match crypto regulatory practices with financial policies at the national level.
STABLE Act Gains Momentum in House
Representatives have reviewed a different version of the original bill, the ‘STABLE Act,’ to achieve the objectives of the GENIUS Act. This legislation focuses on transparency, reporting requirements, and operational standards for stablecoin providers. All Republican members of Congress from both legislative branches support the fundamental regulatory concepts.
The STABLE Act calls for a structured auditing process and detailed disclosures from all registered stablecoin issuers in the United States. Every stablecoin’s value must be supported through authorized financial institution reserves that are either cash or cash equivalents. The introduced measures protect consumers by stopping monetary loss while safeguarding their investment capital.
While the House has not set a vote date, discussions indicate growing bipartisan interest in regulating stablecoins before broader crypto legislation. People advocate for stablecoin regulation because of its increasing speed and uncontrolled growth. The STABLE Act functions alongside the GENIUS Act because it prioritizes how these programs should be transparent to the public.
Trump’s Executive Order Spurs Action
President Donald Trump signed an executive order in January that indirectly supported the push for regulatory clarity on stablecoins. The newly formed working group started assessing national crypto stockpile requirements and legal regulatory framework needs in accordance with the official administration policy change.
The GENIUS and STABLE Acts were introduced to Congress soon after the president released his executive order. According to Republican lawmakers, the U.S. digital market dominance needs to be stabilized, and these measures ensure dollar retention. Through these new policies, the government maintains its focus on economic security and the development of digital assets.
Critics argue Trump’s ties to World Liberty Financial, which issued the USD1 stablecoin, could pose a conflict of interest. The company’s corporate relationships and political ties have prompted skepticism from Democratic legislators. The lawmakers express concern that uncontrolled influence may result in regulatory bias affecting the journey of the legislative bill.
FAQs
What is the GENIUS Act?
The GENIUS Act is a Senate bill restricting payment stablecoin issuance to approved entities under federal guidelines.
What does the STABLE Act propose?
The STABLE Act requires transparency, full reserve backing, and compliance audits for all registered stablecoin providers.
Will these laws ban stablecoins?
No, they will not ban stablecoins but will regulate who can issue them and under what conditions.
When is the Senate expected to vote?
The Senate may vote on the GENIUS Act before the May 26 Memorial Day recess.
What is USD1?
USD1 is a US-dollar pegged stablecoin launched by World Liberty Financial, a firm linked to Trump’s family.
Glossary of Key Terms
Stablecoin – A cryptocurrency designed to maintain a stable value, often pegged to a fiat currency like the US dollar.
GENIUS Act – A Senate bill that seeks to limit stablecoin issuance to federally approved entities.
STABLE Act – A House bill focused on accountability, reserve backing, and transparency for stablecoin issuers.
USD1 – A stablecoin backed by US dollars, issued by World Liberty Financial.
Permitted Payment Stablecoin Issuer – An entity authorized under federal law to issue payment stablecoins within the US financial system.
Sources
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