In what’s being called a major victory for the cryptocurrency industry, the U.S. Senate has passed legislation related to U.S. dollar-pegged stablecoins.
Stablecoins are cryptocurrencies whose value is pegged to another asset, typically the U.S. dollar or price of gold.
The “GENIUS Act” is legislation that, for the first time, establishes federal guardrails for stablecoins and creates a regulated pathway for private companies to issue digital dollars.
The bill passed in the U.S. Senate in a vote of 68-30.
The passage of the bill is viewed as a major win for the crypto industry, which put around $250 million U.S. into the 2024 election cycle to elect a pro-crypto Congress.
The legislation still must pass the Republican-led House of Representatives, but passage in the Senate signals a turning point for crypto and how it is viewed on Capitol Hill, say analysts.
The GENIUS Act is short for the “Guiding and Establishing National Innovation for U.S. Stablecoins Act.”
It sets clear guardrails for stablecoins, including full reserve backing, monthly audits, and anti-money laundering compliance.
It also opens the door to a broader range of issuers, including banks, financial technology companies, and major retailers looking to launch their own stablecoins.
The legislation also grants sweeping powers to U.S. Treasury Secretary Scott Bessent, who recently said that the U.S. stablecoin market could grow nearly eightfold to over $2 trillion U.S.
A growing number of banks and companies are moving to adopt stablecoins, including Shopify (SHOP), JPMorgan Chase (JPM), and Bank of America (BAC).
Circle (CRCL), one of the largest stablecoin issuers, recently held a successful initial public offering (IPO), where investors demand for its shares was extremely high.
