By a vote of 68-30, the US Senate passed the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act). It will become law when the House passes this bill – or passes a similar bill with differences ironed out in a House-Senate conference committee – and President Trump signs the legislation.
While the passage of the GENIUS Act can be viewed positively as recognition of crypto’s potential, many unnecessary restrictions were put on the issuance of stablecoins that could hinder innovation in the industry and reduce choices and benefits for ordinary American consumers and small businesses, writes the Competitive Enterprise Institute (CEI).
These restrictions include: expansion of the Bank Secrecy Act’s “know-your-customer” (KYC) requirements for “suspicious activity reports”; ban on stablecoins paying interest – or yield – on stablecoins through staking; restrictions on nonfinancial firms directly issuing stablecoins.
“These restrictions have unfortunately been carried over to the GENIUS Act. While the bill thankfully doesn’t prohibit all nonbank firms from issuing stablecoins, as the Biden administration and many others have proposed, it does ban large nonfinancial firms from becoming direct stablecoin issuers. This means some of the most innovative firms in tech and retail won’t be able to bring their innovations to this market,” CEI wrote.