U.S. Senator's GENIUS Act Faces Criticism for CBDC Inclusion

GENIUS Act by U.S. Senators sparks debate over potential CBDC implications.

U.S. Senators introduced the GENIUS Act, signed into law, advancing stablecoin regulation amid concerns it may indirectly support a digital currency initiative.

GENIUS Act Sets Stablecoin Regulatory Framework

The GENIUS Act, introduced by U.S. Senators Bill Hagerty, Tim Scott, Kirsten Gillibrand, and Cynthia Lummis, aims to regulate payment stablecoins. It establishes a framework without directly sanctioning a federal CBDC.

The Act, now law, was supported by President Donald Trump. It outlines state and conditional registration regimes for stablecoin issuers, collectively influencing the U.S. cryptocurrency landscape.

USD-Pegged Stablecoin Issuers Face New Dynamics

The GENIUS Act directly affects USD-pegged stablecoins, potentially reshaping issuer dynamics. Although market volatility isn’t explicitly mentioned, the law enhances clarity, fostering investor confidence.

Experts anticipate significant shifts due to the Act’s delineation of asset backing and regulatory oversight. Historical EU frameworks like MiCA have similarly iterated on stablecoin regulations, provoking short-term market volatility.

GENIUS Act Evolves U.S. Cryptocurrency Regulation

Previous efforts, such as the 2020 STABLE Act proposal, mirrored the GENIUS Act’s stablecoin focus but lacked a comprehensive framework. The GENIUS Act represents a regulatory evolution in U.S. cryptocurrency policy.

Analysis by Kanalcoin experts suggests the law’s regulatory framework will likely increase market stability. Historically, legislative clarity has driven institutional adoption, aligning stablecoin practices with newer legal standards.

“The GENIUS Act is about ensuring America leads in responsible innovation for stablecoins, not about introducing a centralized surveillance tool as a digital currency.” — Senator Bill Hagerty, Lead Sponsor, U.S. Senate

For further details, the Text of House Bill 5403, 118th Congress provides additional context on related legislative actions.

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