GENIUS Act Could Establish Dollar Dominance, Write ‘Rulebook’

The Guiding and Establishing Nationwide Innovation for US Stablecoins Act, referred to as the GENIUS Act, now faces a key vote in america Congress, and the stakes for the cryptocurrency business are excessive.

If the US Senate, the higher chamber of the nation’s Congress, passes the GENIUS Act on Tuesday, it might transfer the nation one step nearer to regulating stablecoins, scoring an enormous win for the crypto business and for the Trump administration, which is supporting the laws. The invoice’s subsequent cease is the Home of Representatives, the place it is going to bear additional scrutiny from lawmakers.

The Senate voted 68-30 to advance the bill on June 11, opening the GENIUS Act as much as amendments earlier than a remaining vote. A number of Democrats joined a majority of Republicans to win the cloture vote, with some echoing US President Donald Trump’s need to make the nation “the crypto capital of the planet.”

Within the lead-up to the vote, business voices have expressed a hopeful outlook. Coinbase Chief Authorized Officer Paul Grewal sounded a optimistic be aware on X forward of the vote, highlighting its potential to convey regulatory readability. Not everyone seems to be on board, nonetheless.

Critics argue the GENIUS Act lacks sufficient safeguards, significantly across the potential for self-dealing by entities approved to subject stablecoins. Senator Elizabeth Warren has been among the many most vocal opponents, warning that the invoice might “actively facilitate” misuse tied to Trump’s crypto companies.

Amongst key amendments to the laws is a provision geared toward preventing elected officials and their families from issuing stablecoins, a transfer meant to deal with among the considerations about conflicts of curiosity.

If enacted, the GENIUS Act might considerably reshape the panorama for US crypto regulation. Trade stakeholders instructed Cointelegraph the laws could assist solidify the greenback’s position within the digital economic system and lay the inspiration for a extra structured world monetary framework.

Associated: Senators plan to amend GENIUS Act to address Trump family’s stablecoin

A bridge between TradFi and the blockchain

The GENIUS Act would set up an oversight system for stablecoins, permitting issuers to register with the US authorities. As well as, issuers could be required to have 1:1 backing for his or her stablecoins, face common audits and undergo Anti-Cash Laundering rules.

In response to Roshan Robert, CEO of OKX US, the GENIUS Act is a “robust sign” that the US authorities is taking a realistic strategy to digital asset innovation. The Act creates “a significant bridge for conventional finance to discover blockchain-powered funds and settlement.”

“For OKX, clear regulation in key markets just like the U.S. empowers us to construct accountable, clear infrastructure for world customers,” Robert mentioned. “The GENIUS Act not solely helps licensed innovation but additionally lays the groundwork for interoperability between centralized and decentralized techniques — a future we see as inevitable.”

Stablecoins are sometimes seen as a key bridge between conventional finance and digital belongings. These fiat-pegged tokens, most of that are linked to the US greenback, might enable individuals around the globe to simply ship cash throughout borders with fewer charges, and pay for items at quite a lot of retailers.

Associated: What is the GENIUS Act? How it could reshape US stablecoin regulation

A ‘rulebook for the subsequent world monetary system’

The laws might additionally set the stage for the regulation of decentralized, programmable cash, probably a blow to the prospects of a central financial institution digital foreign money (CBDC) within the US.

“The stablecoin invoice is equally necessary,” mentioned Mike Cahill, CEO at Douro Labs. “With main monetary establishments already exploring issuance, clear federal guardrails will legitimize stablecoins as a brand new class of programmable cash — built-in into funds, settlement, and even treasury administration.

“If the U.S. will get this proper, it received’t simply lead the crypto market — it is going to write the rulebook for the subsequent world monetary system.”

Associated: GENIUS Act may cement US dollar dominance in digital economy

The GENIUS Act might refute de-dollarization

Since Trump imposed tariffs on commerce companions, discussions round de-dollarization, a possible world shift away from reliance on the US greenback as the worldwide reserve foreign money, have gained traction. Supporters of the invoice mentioned it might strengthen the greenback’s place as most stablecoins are pegged to the greenback, probably enhancing its affect within the digital economic system.

In response to DefiLlama, the 2 largest stablecoins within the crypto area are pegged to the greenback — Tether’s USDt (USDT) and Circle’s USDC (USDC). Collectively, these tokens make up $217.5 billion or 86.4% of the entire stablecoin market cap of $251.7 billion.

“Speak of de-dollarization misses the larger level: Greenback-backed stablecoins are the brand new Twenty first-century monetary energy device,” mentioned Invoice Sebell, government director of XDC Basis. If the GENIUS Act have been to cross, now “anybody with a smartphone can maintain a compliant digital greenback, growing attain and relevance for USD on the precise second critics predict its decline.”

Journal: Legal Panel: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight