The failure of the GENIUS Act in the Senate last week was a setback for the crypto industry, but recent bipartisan amendments have sparked hope for its passage. These amendments, aimed at addressing concerns raised by both Democrats and Republicans, include significant restrictions on Big Tech firms regarding stablecoins.
One key amendment prohibits non-financial publicly traded companies, such as Meta, Amazon, Google, and Microsoft, from issuing stablecoins unless they meet strict criteria for financial risk, consumer data privacy, and fair business practices. This measure is intended to prevent these tech giants from entering the stablecoin market and maintain the separation between banking and commerce.
Another version of the amendment suggests that Big Tech may also be prohibited from holding stablecoins in any capacity. The final language of the bill is still being finalized, so the exact details of these restrictions remain uncertain.
The GENIUS Act amendments are designed to address the potential for fraud and misuse of stablecoins, which have come under increased scrutiny in recent months. The requirement that stablecoins cannot bear US-themed branding, like Trump’s USD1, is one example of a specific incident that these amendments aim to prevent.
The amendments also aim to tighten regulations on stablecoin issuers, making it easier for enforcement actions to be taken against noncompliant firms. These actions would fall under the purview of the Treasury Department, as other regulatory bodies like the SEC and CFTC have faced challenges in overseeing the crypto market.
Elon Musk and other influential figures are specifically mentioned as having conflicts of interest in the stablecoin market, highlighting the need for increased oversight and regulation. While the fate of the GENIUS Act remains uncertain, these proposed amendments represent a significant victory for those skeptical of the crypto industry in Congress.
Overall, the proposed changes to the GENIUS Act signal a shift towards stricter regulations on stablecoins and greater scrutiny of Big Tech’s involvement in the market. As the crypto industry continues to evolve, it is clear that legislative action is needed to ensure consumer protection and financial stability in this rapidly growing sector.