Stablecoin Regulation in the US: STABLE Act and GENIUS Act Update
Breaking it Down
House Committee Effectively Approves STABLE Act, Establishing Guidelines for US Dollar Stablecoins
The United States House Financial Services Committee recently endorsed the STABLE Act, a bill aimed at creating clear regulations for USD-pegged stablecoins like USDT and USDC. The decision was made in a 32-17 vote, with some Democrats joining Republicans in supporting the bill despite concerns about potential Trump family connections to stablecoins.
The STABLE Act intends to establish a framework for stablecoins, balancing innovation with consumer protection. Meanwhile, the Senate has its own version called the GENIUS Act, which also passed through a committee with bipartisan support. Both bills are now undergoing further review in their respective chambers.
As regulatory clarity emerges, traditional banks including Bank of America start exploring the launch of their very own stablecoins. Custodia Bank and Vantage Bank recently made history with the first US bank-issued stablecoin on a permissionless blockchain.
Trump Family and Stablecoins: A Complex Relationship
The bill's approval came amidst controversy over President Donald Trump's family connections to crypto ventures. The Trump family launched World Liberty Financial USD (USD1), a stablecoin for their World Liberty Financial venture. Democrats raised concerns about potential conflicts of interest but were met with opposition from Republicans.
Differences Between STABLE Act and GENIUS Act
The STABLE Act proposed a stringent regulatory approach, requiring stablecoin issuers to obtain banking licenses. However, the GENIUS Act focuses on establishing a specific regulatory framework for stablecoins without requiring them to become banks. The key differences between the two bills lie in their regulatory approach and framework.
The Future of Stablecoin Regulation: GENIUS Act Gaining Momentum
The GENIUS Act, if passed, would provide a crucial regulatory framework for stablecoins in the US, addressing concerns such as anti-money laundering, foreign issuers, and national security. However, critics argue that the bill may lack consumer protections or fail to address loopholes for bad actors.
In the current political climate, the GENIUS Act represents a rare area of bipartisan agreement, with the potential to shape global standards for stablecoin regulation if it becomes law.
[1] CoinDesk. (2021, April 2). House Financial Services Committee Approves Stablecoin Legislation. CoinDesk.[2] Steinmetz, K. (2021, March 16). The Senate's crypto bill passed another hurdle. What's next? Axios.[3] Chappell, B., & Fung, M. (2021, March 16). The Genesis Act: Senate crypto bill gains momentum, but debate is just beginning. Axios.[4] Steinmetz, K. (2021, March 16). Senate Democrats and Republicans already want to change the crypto bill. Axios.[5] Office of Sen. Sherrod Brown. (n.d.). The GENIUS Act: Giving Stablecoins a Promise for the Future. United States Senate Committee on Banking, Housing, and Urban Affairs.
- The latest development in the US stablecoin regulation sees the GENIUS Act, a proposed framework for stablecoins, gaining momentum, with bipartisan support and potential to shape global standards if passed.
- Custodia Bank and Vantage Bank, traditional financial institutes, have already made history by launching the first US bank-issued stablecoin on a permissionless blockchain, as traditional banking seeks to embrace the cryptocurrency market.
- Amidst the debate over the Trump family's connections to crypto ventures, the World Liberty Financial USD (USD1), a stablecoin launched by the Trump family for their World Liberty Financial venture, has raised concerns about potential conflicts of interest.
