Bipartisan support for the GENIUS Act, a stablecoin regulatory framework introduced by Senator Bill Hagerty, continues to grow with the recent addition of Maryland Senator Angela Alsobrooks as its co-sponsor, reported by Fox journalist Eleanor Terrett. This move makes Alsobrooks the first Democrat from the Banking Committee to support the Act, alongside Senator Kirsten Gillibrand, who is already on the board.
The main aim of this bill is to establish clear regulations for issuance and payment of stablecoins, which are digital assets pegged to fiat currencies like the U.S. dollar.
Key Provision of GENIUS Act
The GENIUS Act addresses the previous concerns regarding state versus federal oversight of stablecoin issuers. It will allow the state regulators to supervise payment of stablecoins with a market capitalization of under $10 billion while imposing stricter regulations for the larger issuers. This dual approach is being establish to protect consumers and keep the financial system stable.
Senator Hagerty emphasized that the legislation would enhance transaction efficiency and expand financial inclusion, facilitating seamless cross-border payments. He stated, “This legislation will expand financial inclusion and provide much-needed clarity to ensure the industry can innovate and grow here in the United States.” Chairman of the Senate Banking Committee, Tim Scott, expressed these sentiments, highlighting the importance of a regulatory framework that supports innovation while protecting consumers.
Future Outlook
The GENIUS Act mandates that stablecoin issuers maintain one-to-one reserves and comply with U.S. anti-money laundering regulations. It also prohibits algorithmic stablecoins, ensuring that only permitted payment stablecoin issuers can operate within the U.S. market. This will solidify U.S. position in innovation within the crypto sector.
Also Read: SEC’s New Stance on Staking: A Shift Towards Clearer Regulations?
