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The “GENIUS Act,” a legislative proposal aiming to implement federal regulation on stablecoins in the U.S. Senate, has been revisited after failing its initial vote. Initially rejected by a 48-49 vote, the proposal is set for a new vote following revisions made amid bipartisan negotiations last week.
Cryptocurrency Law Vote
The fate of the legislation remains uncertain, as Democrats had unanimously opposed it in the first vote, joined by two Republican senators. Key concerns from Democrats included insufficient consumer protection and apprehensions regarding former President Trump’s connections to the cryptocurrency sector. Recent negotiations led to amendments addressing some of these issues.
Achieving success in the Senate requires 60 votes in favor. With Republican support largely anticipated, securing votes from at least nine Democratic senators is crucial. Senators Gillibrand and Warner are counted on to vote affirmatively, along with Alsobrooks and Gallego, who participated in the negotiations. Additionally, support from seven other Democratic senators is anticipated.
Legislation May Pass
Democratic negotiators released a document on Thursday detailing the concessions obtained in the legislation. It emphasized the preservation of consumer protection laws, ensuring both federal and state regulations remain valid. Stricter regulations are imposed on large technology companies issuing stablecoins, mandating compliance with systemic risk and data privacy conditions.
The revised proposal mandates foreign issuers to comply with both regulatory and technical standards set by the U.S. Furthermore, it explicitly bans misleading terms like “FDIC insured” in stablecoin marketing. Profit-earning stablecoins, regardless of foreign or domestic origin, are completely prohibited.
The legislation additionally empowers the Treasury Department to suspend licenses and grants extra authority over risky practices. Provisions for protecting stablecoin investors in bankruptcy scenarios have been incorporated. Lastly, new mandatory national security and anti-money laundering measures through FinCEN are included.
Senator Cynthia Lummis expressed gratitude for the persistence in legalizing the GENIUS Act, while Democratic Senator Mark Warner highlighted the $250 billion sized stablecoin market and the necessity for U.S. participation despite existing concerns about the Trump family’s potential use of cryptocurrencies to evade oversight.
Despite significant advancements in the new proposal, the final outcome remains uncertain. Attention focuses on whether Democrats who previously opposed it may change their stance following the concessions. The vote’s outcome will potentially set a precedent for U.S. digital asset regulatory practices, marking a positive turn for cryptocurrencies should the law pass and reach Trump’s desk.
If passed, the bill would enforce radical regulations protecting consumers and limiting major tech companies’ dominance in the stablecoin market. Additionally, foreign crypto asset issuers must conform to stringent American regulations, signaling a new legal framework for the digital asset ecosystem and enhancing U.S. competitiveness globally.
