The Senate passed the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act this week, which creates a federal regulatory framework for stablecoins.
Senators, including Arizona Democratic Representative Ruben Gallego, voted 68-30 to send this bill to the House. Arizona’s other US senator, Democrat Mark Kelly, did not vote on this legislation.
Stablecoins, according to the act’s summary page, are “digital assets which an issuer must redeem for a fixed value.”
The GENIUS Act requires stablecoin issuers to be federally or state-qualified. In addition, these issuers must maintain one-to-one reserves in US dollars to back up these stablecoins.
Following the vote, Gallego commented that the “bipartisan passage of the GENIUS Act is proof of what can be achieved through honest negotiations and a willingness to work across the aisle.”
“With the GENIUS Act’s passage, we are meaningfully closer to a stablecoin regulatory landscape in the U.S. that provides clear rules of the road, protects consumers and holds bad actors accountable,” said the Democratic legislator.
Gallego expects the GENIUS Act to “pass the House with equally strong bipartisan support and get signed into law.”
Even though the senator emphasized the bill’s passage when it was first introduced, Gallego and other Democratic senators expressed concerns about it last month.
Gallego and eight other Democrats expressed concern about overseas stablecoin issuers and anti-money laundering legislation.
Foreign issuers are allowed to operate in the United States under the GENIUS Act, but the US Department of the Treasury must determine whether a foreign regulator is from a country with similar regulations to the United States.
According to the bill’s anti-money laundering provisions, stablecoins will be subject to the Bank Secrecy Act.
The BSA established recordkeeping and reporting requirements for “national banks, federal savings associations, federal branches, and agencies of foreign banks,” according to the Office of the Comptroller of the Currency.
Currently, the House is working on its own version of the GENIUS Act, known as the STABLE Act. The House Committee on Financial Services voted 32-17 in April to pass this bill.
President Donald Trump urged the House to quickly pass the GENIUS Act without any changes.
