- The Senate Banking Committee has moved forward with the GENIUS Act following a vote on Thursday.
- The bill will proceed to the Senate for a full voting session, after which it can be signed into law by the President.
- The GENIUS Act aims to establish a clear regulatory structure for stablecoin transactions in the United States.
On Thursday, the Senate Banking Committee cast their votes to advance the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, which seeks to implement sound regulations for stablecoin payments across the nation. With the Committee’s endorsement, the bill is set to be introduced to the Senate for a floor vote. If successful, it will then be forwarded to the President for signing.
Senate Banking Committee greenlights GENIUS Act, Senate vote to follow
The Senate Banking Committee approved the GENIUS Act in a bipartisan vote with a tally of 18-6.
According to a statement from Senator Bill Hagerty, the bill will undergo a full Senate vote within President Donald Trump’s initial 100 days in office.
If sanctioned at the Senate level, it will be presented to President Trump for an official signing, potentially marking it as the first stablecoin regulatory legislation signed into law in the United States.
Banking Committee chair Tim Scott remarked, “The historic advancement of the GENIUS Act—marking the first digital assets legislation to progress in the Senate—is a significant move towards ensuring stablecoins are safe and dependable components of the financial landscape.”
Introduced by Senator Hagerty in February, the GENIUS Act aims to solidify a coherent framework for stablecoin payments within the US. Hagerty disclosed an update to the bill on Monday, collaborating with Senators Tim Scott, Cynthia Lummis, Kirsten Gillibrand, and Angela Alsobrooks.
Changes made address particular elements within the bill, including regulatory stipulations for international stablecoin issuers. Additionally, the Committee incorporated several amendments before the bill passed through the hearing, as reported by Fox Business’s Eleanor Terrett.
These amendments necessitate that regulators verify the qualifications of key executives at entities seeking to launch stablecoin services.
Amendments also include clarifications on reserve requirements and prioritize stablecoin customers over creditors in bankruptcy scenarios.
Notably, several Democrats recognized the importance of the bill and expressed support for its progression.
Nonetheless, Senator Elizabeth Warren, who has been a vocal critic of cryptocurrency, proposed amendments to the bill. She, alongside some Senate Democrats, raised concerns that the regulations could inadvertently encourage illicit financial practices.
“It would be irresponsible to advance this bill given the numerous gaps that have been identified, particularly at a time when news is emerging about Donald Trump attempting to initiate his own stablecoin in partnership with an entity known for legal infractions,” Warren stated during the hearing.
Warren’s comments were supported by reports from media outlets, revealing that representatives of Donald Trump’s family are exploring investments in Binance US and the creation of a US Dollar-backed stablecoin. However, on Thursday, Binance founder Changpeng Zhao dismissed these claims through a post on X.
She also expressed concerns that the legislation might fall short in safeguarding consumer funds associated with stablecoins. Despite Senator Warren’s apprehensions regarding the GENIUS Act, Republican members overruled her suggested amendments.
Bitcoin, Altcoins, and Stablecoins FAQs
Bitcoin stands as the largest cryptocurrency by market cap, designed as a virtual currency to function as money. It is decentralized, meaning that no single entity can control it, removing the need for intermediaries in financial transactions.
Altcoins refer to any cryptocurrencies other than Bitcoin, although Ethereum is sometimes excluded from this classification due to its unique position. If one accepts this premise, Litecoin is recognized as the first altcoin, having forked from Bitcoin’s protocol, thus being seen as an “enhanced” variant.
Stablecoins are cryptocurrencies designed to maintain a consistent price, typically backed by a reserve of the asset they represent. They are pegged to a commodity or financial instrument, like the US Dollar (USD), with their supply regulated according to demand or an algorithm. The primary intention of stablecoins is to facilitate transactions for investors looking to trade in cryptocurrencies while providing a way to store value amidst the volatility common in other cryptocurrencies.
Bitcoin dominance refers to the ratio of Bitcoin’s market capitalization compared to the total market capitalization of all cryptocurrencies. This metric offers insight into investor interest in Bitcoin. A high BTC dominance is typically observed in favorable market conditions when investors prefer stable, high-capitalization assets like Bitcoin. Conversely, a decrease in Bitcoin dominance may indicate that investors are reallocating their investment to altcoins in anticipation of greater returns, often triggering altcoin rallies.