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Regulatory pressure in the U.S. has significantly hampered innovation for cryptocurrency enthusiasts over the years. Although things began to shift with Trump’s presidency, the reality remains that regulations evolve gradually over time. In this context, the GENIUS Act is of considerable importance.
The U.S. and Web3
The U.S. has been a birthplace of numerous technological innovations, relying heavily on this strength. Its position as a hub of innovation has allowed it to reach its current power in the internet 2.0 era. The world’s largest phone brand, social media giants, and infrastructure providers all operate from there.
However, when it comes to Web3, which signifies the ongoing evolution of the internet, the U.S. has fallen significantly behind. In 2023, the European Union adopted comprehensive cryptocurrency regulations. These regulations have been implemented across various sectors. For years, China has strived to strengthen its local digital currency against the U.S. dollar. The UAE is progressing towards becoming the global Web3 hub with significant incentives. During the Biden administration, the U.S. merely observed these developments. Nevertheless, U.S. innovation, which gave birth to giants like Ripple 
$2 and Solana 
$176, must now create the necessary environment for their rapid growth.
U.S. Cryptocurrency Legislation
Senators Bill Hagerty, Cynthia Lummis, and Tim Scott have announced the National Innovation Guidance and Building (GENIUS) Act, which seeks bipartisan support and addresses stablecoins. This legislation aims to protect consumers by imposing strict reserve requirements on stablecoin issuers, effectively anchoring tokenized currencies to fiat money, which is one of the fundamental building blocks of Web3.
One of the most crucial steps the U.S. must take to support cryptocurrency innovation is to establish a legal framework for stablecoins. This is also vital for reinforcing the dollar’s global role. The proposal bans the issuance of algorithmic stablecoins, which experienced significant risks, as seen in the LUNA-UST incident.
To address illicit uses, approved stablecoin issuers will be required to comply with U.S. anti-money laundering and sanctions regulations. This will also mark an important milestone in eliminating the FUD surrounding stablecoins.
Finally, the bill outlines protective mechanisms and procedures for investors in the event of a stablecoin issuer’s bankruptcy. Overall, the proposal is likely to gain bipartisan support and eliminate uncertainties related to stablecoins while there is still limited time.
