Senate Advances GENIUS Act Stablecoin Bill

Key Notes

• Democratic Senators who previously opposed the bill, including Mark Warner, Adam Schiff, and Ruben Gallego, have shifted their stance to support it.
• The GENIUS Act outlines strict AML/KYC protocols, mandates 1:1 reserves backed by USD.
• Following the Senate's debate and vote, the GENIUS Act will move to the House of Representatives.

On May 19, the US Senate managed to successfully move ahead with the stablecoin bill, or the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS ACT), with a 62-32 procedural vote. The long-awaited crypto regulation on stablecoin seems to be moving ahead to the Senate floor.

The Democratic Senators, who tried to block the bill last week, also voted in favour of the GENIUS Act. Mark Warner, Adam Schiff and Ruben Gallego have changed their vote in favour of the stablecoin bill. The Senate will now debate and vote on advancing the bill to the House. With only a simple majority needed, supporters remain optimistic about its approval.

Last week, Wyoming Senator Cynthia Lummis, who’s backed the bill from the very beginning, stated that she expects the bill to be passed by the US Memorial Day on May 26.

Earlier this month, several Democratic Senators decided to withdraw support for the bill while blocking a motion to move it forward. They cited reasons like the bill’s Anti-Money Laundering provisions, as well as potential conflicts of interest arising from the association of Trump crypto ventures.

Senator Mark Warner shared similar concerns even yesterday. However, he stated that the United States cannot “afford to keep standing on the sidelines” while the crypto industry continues to make significant progress. Warner noted:

“We cannot allow that corruption to blind us to the broader reality: blockchain technology is here to stay. If American lawmakers don’t shape it, others will — and not in ways that serve our interests or democratic values.”

GENIUS Act: US Stablecoin Bill Details and Next Steps

The GENIUS Act approval will bring a comprehensive framework for USD- pegged stablecoins operating in the country. It will also bringing stability and security frameworks for digital assets. Key provisions of the GENIUS Act include:

1. Implementing strict anti-money laundering (AML) and know-your-customer (KYC) protocols.
2. Ensuring issuers maintain 1:1 reserves backed by U.S. dollars.
3. Preventing potential monopolistic practices by major technology firms.
4. Introducing federal supervision for large issuers with a market cap exceeding $10 billion.

After the Senate concludes its full vote following the floor debate, the GENIUS Act will proceed to the House of Representatives for review and voting. The House has been developing its own stablecoin legislation, the STABLE Act, leading experts to anticipate that reconciling the two bills may be essential for achieving regulatory clarity. Last week, Senator Bill Hagerty expressed confidence in the Senate passing the GENIUS Act, fueling optimism.

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