Exciting news from Capitol Hill! The GENIUS Act just sailed through the Senate Banking Committee with a strong 18-6 bipartisan vote, advancing the bill to be considered by the full Senate.

The GENIUS Act is the brainchild of Senator Bill Hagerty, and it clearly resonated across the aisle. The bill secured support from every Republican member of the Committee, alongside Democratic Senators Mark Warner, Andy Kim, Lisa Blunt Rochester, Ruben Gallego, and Angela Alsobrooks.

Hagerty expressed his enthusiasm for the bill’s broad support, emphasizing how crucial it is for sparking financial innovation and keeping the U.S. at the forefront of the digital asset revolution.

He added: 

“This legislation is a critical first step in establishing a safe and pro-growth regulatory framework that will unleash innovation and advance the President’s mission to make America the world capital of crypto. I look forward to seeing this bill pass the Senate in the near future and ultimately signed into law by President Trump.”

So, what’s the GENIUS Act all about? Essentially, it aims to set up a clear and comprehensive regulatory structure for stablecoins in the United States, covering everything from how they’re issued to how they’re overseen. A key part of the proposed law is that stablecoin issuers would need to maintain 1:1 reserves. This means for every stablecoin out there, there needs to be an equivalent amount in reserve, held as US dollars, insured bank deposits, or short-term Treasury bills.

The bill also provides some flexibility, creating a two-pronged regulatory approach. Issuers could opt for federal oversight through the Office of the Comptroller of the Currency (OCC) or choose state-level supervision, as long as the state rules meet federal standards.

Committee Chairman Senator Tim Scott also underscored the vital need for regulatory clarity, pointing out that certain industries and everyday Americans have been navigating in the dark for far too long.

Scott elaborated:

“This uncertainty also stifled innovation here at home, in America. That changes today with the GENIUS Act, which is a bipartisan step forward in ensuring that stablecoins are safe and reliable tools in the financial system.”

The Committee Chairman further remarked that the bill is designed to “end the weaponization of financial regulators.”

This comment likely refers to a significant aspect of the bill: it specifically classifies stablecoins as not being securities. This would place them outside the purview of the Securities and Exchange Commission (SEC), which has been known for its “regulation by enforcement” strategy in the past.

Positive Reactions Roll In

Senator Cynthia Lummis, a well-known advocate for crypto regulation and a member of the Committee, noted that the bill’s successful passage through the Committee significantly strengthens the regulatory landscape for stablecoin issuers.

She also added that this bill gives the US a “competitive edge in the fast-moving world of digital assets.”

Circle CEO Jeremy Allaire described the Committee vote as a “massive move in Washington today,” highlighting the bipartisan nature of the decision. He also emphasized that it’s a “huge step towards upgrading and making the dollar more competitive.”

Coinbase chief policy officer Faryar Shirzad applauded the bill’s progress and expressed gratitude to the senators who championed it.

Blockchain Association CEO Kristin Smith welcomed the decision, stating that the GENIUS Act’s advancement is a smart move forward for American innovation and economic leadership.

Now, all eyes are on the full Senate as the bill moves to the next stage for a vote. If it becomes law, the GENIUS Act promises to deliver much-needed clarity for both stablecoin businesses and users, reinforcing the US’s position as a leader in the evolving world of digital currency regulation.

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