Senate Committee Greenlights Hagerty's Landmark Stablecoin Legislation

- GENIUS Act Passed Senate Banking Committee, Brings Clarity to Stablecoin Regulation - Led by Senator Bill Hagerty, Strengthening Investor Protection and Market Stability [Unblock Media] The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) has passed the Senate Banking Committee, which is expected to have multi-faceted impacts on the cryptocurrency market. If the bill passes the Senate and is signed by the President, it will lead to greater regulatory clarity for the stablecoin market. This will be a significant milestone for enhancing investor protection and market stability. The GENIUS Act passed the Senate Banking Committee by a vote of 18-6, aiming to establish a clear regulatory framework for stablecoins to promote investor protection and market stability. Initiated by Senator Bill Hagerty, the key provisions of the bill are as follows: The GENIUS Act defines a stablecoin as a "digital currency pegged to a specific asset like the U.S. dollar." This definition clarifies that stablecoins are stable digital assets distinguished from the highly volatile traditional cryptocurrencies. The bill mandates that stablecoin issuers must hold sufficient liquid assets as reserves. These reserves should consist of safe assets like cash and treasury bonds and be transparently managed through third-party audits. Issuers of stablecoins must obtain licenses from federal or state governments. Applicants must submit a business plan, reserve management plans, and AML/KYC (Anti-Money Laundering/Know Your Customer) compliance plans, and undergo rigorous review by authorities. To prevent money laundering and terrorist financing, the bill requires that stablecoin transactions comply with AML/KYC standards akin to those of financial institutions. It includes specific obligations like identity verification, transaction monitoring, and reporting suspicious activities. Should the GENIUS Act be approved, it is expected to bring regulatory clarity to the stablecoin market, significantly enhancing investor protection and market stability. It may also help establish the U.S. as a leading nation in the cryptocurrency industry, increasing transaction efficiency and capital liquidity through wider stablecoin adoption. This could solidify the status of the dollar as the global reserve currency. Following the committee's approval, Senator Bill Hagerty commented on X (formerly Twitter), "I am pleased that the GENIUS Act has successfully passed the Senate Banking Committee with bipartisan support. This bill is a critical first step in creating a secure, growth-friendly regulatory framework that advances the President’s mission to make the U.S. the global capital of cryptocurrency. I look forward to it passing the Senate and eventually being signed into law by President Trump.” However, there are challenges in the bill's passage process. Some Democratic senators oppose the bill, citing inadequate consumer protection and potential financial instability. Debates center on the adequacy of reserve requirements and the scope of federal regulatory authority. High reserve requirements, stringent licensing procedures, and excessive AML/KYC obligations could hinder market entry for startups and stifle innovation. Additionally, increased compliance costs could raise stablecoin transaction fees, burdening users. Certain economic groups worry about large enterprises entering the banking sector, arguing it could disrupt the current financial market order. Concerns include intensified competition with existing financial institutions, market concentration, and data monopoly if large tech companies issue stablecoins and enter banking. In conclusion, while the GENIUS Act is a significant first step towards resolving regulatory uncertainties in the stablecoin market, its final passage and specific regulations will determine its market impact. This detailed explanation aims to help readers better understand the bill’s contents and potential effects.