Recently, 13 Republican representatives boldly rejected the GENIUS procedural vote, challenging Trump. However, after Trump’s individual efforts, all three laws were approved today. This article delves into the implications of these developments and outlines the progression of the legislative process. What changes can we anticipate moving forward? We address all the details you are curious about.
U.S. Approves Cryptocurrency Regulation
An exciting week unfolds in the realm of cryptocurrency as the House of Representatives grants approvals for GENIUS and CLARITY following a brief pause. After the stablecoin law was passed by an overwhelming majority, the other two acts received approval as well. Supported by both parties, 102 Democrats and 206 Republicans endorsed the stablecoin regulation (GENIUS) previously prepared and approved by the Senate. To expedite the process, the House’s STABLE act, serving the same purpose, was set aside.
Tomorrow, after U.S. markets open, Trump will ceremoniously sign GENIUS. GENIUS and CLARITY, providing frameworks to regulate cryptocurrencies and stablecoins, respectively, propel crypto markets into an irreversible path. Traditional finance will comfortably enter this legally legitimized and regulated environment.
The U.S. anti-CBDC law prohibits central bank digital currencies due to surveillance concerns. Rather, this is favorable for cryptocurrencies. While CBDCs are banned, stablecoins, mainly on the Ethereum 
$2,301 network, gain traction. In the wake of House approval, CLARITY is set for a Senate vote, akin to GENIUS’ journey.
Delving into GENIUS Regulations
With GENIUS being signed tomorrow, its details are of utmost importance. Under this law, only U.S.-licensed issuers can issue stablecoins within the region. Foreign companies must comply with requirements to serve U.S. customers. Direct transfers or personal wallet usage are excluded from issuance and sales restrictions.
Stablecoin issuers must back USD-indexed tokens with reserves at a 1:1 ratio. Acceptable reserves include U.S. dollars, Treasury bills (≤93 days), repos, and Federal Reserve deposits, explicitly barring issuers from using their own tokens as reserves.
Transparency rules mandate monthly public disclosures of reserves, ensuring comprehensive security measures against fraud. Stablecoin issuers must clearly declare policies on redemption and repayment.
Repledging is banned, with few exceptions, and interest payments are prohibited. This implies that interest-bearing stablecoins in DeFi protocols will be favored, enhancing potential gains on Ethereum network protocols.
Companies issuing stablecoins are restricted to issuance, redemption, and reserve management, preventing participation in other ventures. Amid these regulations, SHARPLINK filed for a $5 billion stock sale to buy ETH.
Certain criminal convictions disqualify individuals from being stablecoin issuers. Public companies must secure special approval for issuance. Federal approval is required for issuers, with decisions rendered within 120 days. Companies denied can appeal the decision, establishing a clear path for aspiring issuers.
Stablecoin issuers with more than $50 billion, regardless of their location, are subject to U.S. oversight. Unauthorized issuance entails a five-year imprisonment. Penalties for compliance violations are well-defined but intricate for investors.
State regulators hold jurisdiction over issuers within their states. The Federal Reserve can intervene under extraordinary circumstances. Issuers must implement BSA compliance programs, facing potential bans if stablecoins fail to comply with regulations.
In bankruptcy, stablecoin holders have priority rights over reserve assets, mitigating risks of peg issues in exchanges. Stories of stablecoins losing their peg (>1% below $1) become extinct under this law.
The legislation will be effective 18 months post-publication or 120 days after regulatory rules are finalized. Stablecoins won’t be classified as securities or commodities.
