Senate Gives Thumbs Up to First US Stablecoin Bill

The US Senate has taken a major step toward regulating stablecoins, voting to advance the GENIUS Act, the first-ever legislation specifically targeting these digital assets. This bipartisan decision comes after weeks of debate and a brief hold-up by Senate Democrats.

From Filibuster to Passage

Earlier this month, Democrats had blocked the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) due to concerns about former President Donald Trump’s involvement in the cryptocurrency sector. However, after negotiations and amendments, a group of crypto-friendly Democrats managed to sway their colleagues. The Senate voted 66-32 to end the filibuster, paving the way for a full debate and potential passage later this week.

Key Concerns and Debates

Despite the progress, not everyone is on board. Progressive Democrats like Senator Elizabeth Warren of Massachusetts remain strongly opposed, arguing that the bill doesn’t do enough to protect consumers and prevent potential misuse by criminals or foreign entities. She and Senator Kirsten Gillibrand of New York even engaged in a heated exchange on the Senate floor about the bill’s potential risks.

“Passing this bill means that we can expect more anonymous buyers, big companies and foreign governments to use the president’s stablecoin as both a shadowy bank account shielded from government oversight and as a way to pay off the president personally,” Warren said. “For crooks, it’s a two-for-one.”

What’s in the Amended Bill?

NBC News reports that the amendment agreed upon by Senators last week addresses several key Democratic concerns. It includes:

• New consumer protection rules for stablecoin issuers.
• Limitations on the ability of tech giants like Meta to issue stablecoins.
• Ethics standards for special government employees, potentially impacting figures like Elon Musk and David Sacks.

The Growing Importance of Stablecoins

This debate underscores the growing recognition that stablecoins, digital assets pegged to the value of traditional currencies, are a significant force in the financial world. With over $230 billion in circulation and increasing integration into global payments systems, policymakers are grappling with the need to regulate them effectively while allowing innovation to flourish.