The House of Representatives recently passed the GENIUS Act in a decisive 307-122 vote, signaling a bipartisan effort to establish a federal framework for the issuance and supervision of payment stablecoins. The bill has now been sent to President Donald Trump for his signature, with a White House ceremony scheduled for tomorrow.
The overwhelming support for the GENIUS Act, with over 100 Democrats joining most Republicans in voting for the legislation, marks a significant step towards regulating stablecoins in the United States. The bill aims to direct the Federal Reserve to register and examine insured depository institutions at the national level, while also allowing state-chartered entities to issue dollar-backed tokens under strict reserve, disclosure, redemption, and risk-management standards.
Under the GENIUS Act, stablecoin issuers will be required to hold high-quality liquid assets, such as cash, Treasury bills, and short-duration government securities, equal to their token liabilities. They must also provide regular attestations and adhere to consumer redemption rights and segregation rules to prevent rehypothecation of backing assets without explicit customer authorization.
In a parallel development, the House also passed the CLARITY Act with a 294-134 vote and sent it to the Senate for review. This legislation defines jurisdictional lines for digital asset trading venues that list tokens meeting functional tests outside the scope of securities law, provided the networks achieve sufficient decentralization and public float.
The CLARITY Act directs the SEC and the Commodity Futures Trading Commission to establish a joint registration lane for platforms to list qualifying tokens, trade spot and derivatives under coordinated custody standards, and file token disclosure packets based on market capitalization tiers. Issuers selling to US persons will be required to submit initial information statements, and banking supervisors will recognize qualified custodians holding stablecoins and non-stable digital assets under shared segregation and audit rules.
The signing of the GENIUS Act at the White House tomorrow signals a significant milestone in stablecoin regulation, with the Senate now tasked with reviewing the CLARITY Act. These legislative actions represent the first comprehensive efforts to establish federal oversight of stablecoins and define treatment for digital asset trading venues in the current Congress. Stay tuned for further updates on these important developments in the cryptocurrency and blockchain space.