(The Center Square) — The Senate passed the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act this week, which establishes a federal regulatory framework for stablecoins.
Senators, including Ruben Gallego, D-Arizona, voted 68-30 to send this bill over to the House. Arizona’s other U.S. senator, Democrat Mark Kelly, did not vote on this piece of legislation.
According to the act’s summary page, stablecoins are “digital assets which an issuer must redeem for a fixed value.”
The GENIUS Act says stablecoin issuers must be federally or state-qualified. Additionally, these issuers must maintain reserves on a one-to-one basis backing these stablecoins using U.S. dollars.
After its passage, Gallego said 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,” the Democrat added.
Gallego said he anticipates seeing the GENIUS Act “pass the House with equally strong bipartisan support and get signed into law.”
Even though the senator highlighted the bill’s passage when it was introduced, Gallego and other Democratic senators had concerns about the bill last month.
Gallego and eight other Democrats worried about foreign issuers of stablecoins and anti-money laundering provisions.
Under the GENIUS Act, foreign issuers are permitted to operate in the United States, but the U.S. Department of the Treasury will need to determine whether a foreign regulator comes from a country with similar regulations to those in the United States.
For anti-money laundering provisions, this bill says stablecoins will be subject to the Bank Secrecy Act.
The BSA created recordkeeping and reporting requirements for “national banks, federal savings associations, federal branches and agencies of foreign banks, says the Office of the Comptroller of the Currency.
Currently, the House is working on its own version of the GENIUS Act called the STABLE Act. In April, the House Committee on Financial Services approved this bill 32-17.
President Donald Trump called on the House quickly to pass the GENIUS Act without making any changes.
