Senate Passes GENIUS Act for Stablecoin Regulation Amid Calls for Revisions

The Senate has passed the GENIUS Act to regulate stablecoins, with a similar bill, the STABLE Act, progressing in the House. President Trump aims to sign a stablecoin bill into law this year.

Key points include:

The proposed legislation has flaws that need addressing to avoid unnecessary costs for the industry and taxpayers.
The House and Senate bills differ; an agreement is needed on a unified bill.
The current regulatory framework includes over 55 different regulators, leading to potential inefficiencies and a “race to the bottom” among issuers.
Joint rulemaking between multiple agencies may slow down the regulatory process significantly.
Interest-bearing stablecoins and those classified as securities are not adequately covered by the bills.
Systemic risks associated with stablecoins necessitate effective regulation to prevent economic distress.
Proposals suggest selecting the Federal Reserve as the primary regulator and including interest-bearing stablecoins within the regulatory scope.

There is a call for Congress to streamline the regulatory structure to support innovation and address systemic risks effectively.