The Senate Banking Committee has made a significant move by passing the GENIUS Act with bipartisan support on an 18-6 vote. This paves the way for the full Senate to consider the bill, authored by Senator Bill Hagerty, which aims to establish a regulatory framework for stablecoin issuance and oversight in the United States.
The bill received backing from all Republican members of the Committee and Democratic Senators Mark Warner, Andy Kim, Lisa Blunt Rochester, Ruben Gallego, and Angela Alsobrooks. Senator Hagerty expressed his satisfaction with the bipartisan support, emphasizing the importance of fostering financial innovation and maintaining the US’s leadership in digital assets.
The GENIUS Act requires stablecoin issuers to maintain 1:1 reserves, ensuring that each issued token is backed by US dollars, insured bank deposits, or short-term Treasury bills. The proposed law also offers a dual regulatory pathway, allowing issuers to choose between federal oversight under the Office of the Comptroller of the Currency (OCC) or state-level supervision, provided that state regulations meet federal standards.
Committee Chairman Senator Tim Scott highlighted the importance of regulatory clarity, stating that certain industries and American consumers have been in the dark for too long. He emphasized that the bill is a bipartisan step forward in ensuring that stablecoins are safe and reliable tools in the financial system.
The bill also classifies stablecoins as non-securities, placing them outside the jurisdiction of the Securities and Exchange Commission (SEC). This move aims to end the “regulation by enforcement” approach previously adopted by the SEC.
Positive reactions to the bill’s passage were seen from various stakeholders in the crypto industry. Senator Cynthia Lummis, a vocal advocate for crypto regulation, noted that the bill strengthens the regulatory framework for stablecoin issuers, giving the US a competitive edge in the digital asset space. Circle CEO Jeremy Allaire called the Committee vote a massive move and a step towards making the dollar more competitive. Coinbase chief policy officer Faryar Shirzad and Blockchain Association CEO Kristin Smith also praised the bill’s progress, acknowledging its importance for American innovation and economic leadership.
The GENIUS Act will now move to the full Senate for a vote. If enacted, the legislation will provide much-needed clarity for stablecoin issuers and users, reinforcing the US’s position as a leader in digital currency regulation. The bill’s bipartisan support and focus on fostering innovation in the digital asset space showcase a positive step towards regulatory clarity and stability in the crypto industry.