The US Senate is on the cusp of passing a landmark stablecoin regulation bill, with proponents predicting it may clear the Senate as early as next week. The GENIUS Act establishes a pro-growth regulatory framework for payment stablecoins.
U.S. Stablecoin Bill May Clear Senate Next Week, Proponents Say
Senator Bill Hagerty predicted the Senate will ‘make history‘ next week by passing the bill.
Bill Hagerty is an American politician and businessman who served as the United States Ambassador to Japan from 2017 to 2020.
He previously worked in the private sector, holding executive positions at several companies, including a stint as CEO of the Nashville-based investment firm, Hagerty Peterson & Co.
Bill Hagerty was born on August 27, 1969, in Tuscaloosa, Alabama. He earned his Bachelor's degree from Vanderbilt University and an MBA from Harvard Business School.
The Path Forward for U.S. Stablecoin Legislation
The Senate has experienced considerable volatility on the bill in the past two weeks, with its recent failure to clear a so-called cloture vote that would have moved it forward into a formal debate. Despite this setback, proponents of the legislation say the bill may still be debated and passed as early as next week.
Regulatory Framework for Payment Stablecoins
The bill, known as the ‘Guiding and Establishing National Innovation for U.S. Stablecoins‘ (GENIUS) Act, establishes the first ever pro-growth regulatory framework for payment stablecoins. These are typically dollar-based tokens that are vital to crypto trading activity, such as Circle‘s ‘USDC‘ and Tether‘s ‘USDT’.
Regulatory bodies worldwide are grappling with the oversight of stablecoins, a type of cryptocurrency designed to maintain a fixed value relative to a fiat currency.
As their popularity grows, so do concerns about market manipulation and potential risks to financial stability.
The US Securities and Exchange Commission (SEC) has taken steps to clarify the classification of stablecoins as securities or commodities.
In 2022, the SEC charged TerraForm Labs with violating securities laws related to its algorithmic stablecoin.
This development highlights the need for clear and consistent regulation to ensure investor protection and mitigate potential risks.
Adjustments Made to Satisfy Concerns
The latest draft of the bill has been adjusted in modest ways to help satisfy Democrats concerned with consumer protection and national security elements. For example, the bill insists that big public companies like Meta will not be approved as issuers of these tokens. However, private companies such as ‘Elon Musk‘s social media site X‘ may still be eligible.
Bipartisan Support
The crafting of this bill has been a true bipartisan effort, with Senator Kirsten Gillibrand and Senator Bill Hagerty leading the charge. While there is still uncertainty about whether the bill will pass, both lawmakers remain optimistic that it can be passed in the coming days.
Kirsten Gillibrand is an American attorney and politician serving as the senior United States Senator for New York since 2009.
Born on December 9, 1966, in Albany, New York, she graduated from Dartmouth College and later earned her law degree from Columbia Law School.
Before entering politics, Gillibrand worked as a lawyer and served as a prosecutor.
She was first elected to the House of Representatives in 2006 and then became Senator after Hillary Clinton's resignation in 2009.
The Next Steps
The Senate will need to secure 60 votes to advance the bill, which would require several Democrats on board. Once this hurdle is cleared, the Senate will have some time to continue debating the language and making changes before moving forward with actual passage of the bill.
