Senate majority leader fast-tracks GENIUS Act to regulate stablecoins

Senate majority leader John Thune has taken steps to expedite a vote on the GENIUS Act, the US’s first-ever regulatory framework for stablecoins.

The South Dakota Republican has also encouraged other senators to fast-track the GENIUS Act . He even told Republican lawmakers that the chamber would address the stablecoin bill before the May 26 Memorial Day holiday.

GENIUS Act has already earned the approval of the Senate Banking Committee

The Guiding and Establishing National Innovation for US stablecoins (GENIUS) Act is the Senate’s version of two similar bills passing through both chambers of Congress. The bill was introduced by Senator Bill Hagerty and co-sponsored by Senators Tim Scott and Cynthia Lummis.

Hagerty has affirmed that the bill could drive innovation in the country and protect crypto users. He once commented, “I look forward to passing the GENIUS Act in short order to keep digital asset innovation in America, protect customers, and make sure foreign companies are playing by the same rules.”

Aside from the Republican senators’ backing, the bill seems to have captured the favor of Democrats, recently earning the approval of the Senate Banking Committee in an 18-6 vote. 

However, the Senate’s GENIUS Act in its current version differs slightly from the House of Representatives’ STABLE Bill. For instance, the GENIUS Act permits using market funds as reserves, whereas the STABLE Bill is more restrictive.

Both proposals include a $10 billion cap; however, small dissimilarities exist. Additionally, they diverge on the treatment of algorithmic stablecoins: the STABLE Bill imposes a two-year moratorium, while the GENIUS Act calls only for a short study.

According to Brendan Pedersen, co-author at Punchbowl News, Senator Hagerty is set to release an updated version of the bill soon.

Hines added that the bills are progressing at a good pace so far, which could mean that Trump’s desire for them to be signed before recess will be achieved. He argued, however, that the most difficult task would be to write laws on how the US should supervise overall markets.

Professor Arthur Wilmarth is among those who believe the bill is deeply flawed

Thune took steps to fast-track the bill, hoping to limit any delays and allow the floor to act more quickly.

The Senate bill is, however, not without resistance. Arthur Wilmarth, Professor Emeritus of Law at The George Washington University, believes the bill is dangerous and deeply flawed. He asserted that nonbank stablecoin issuers could allow “shadow deposits,” FDIC-insured banks, possibly destabilize the banking industry.

The professor also argued that the bill might open the door for Big Tech and other commercial firms to buy nonbank stablecoin issuers and use stablecoins as a backdoor into the banking sector.

As bills are progressively pushed, Trump is still being criticized for pursuing more crypto interests . Critics believe the President wants to benefit from his crypto policies improperly and invite foreign investors to his family projects. 

Hines has, however, defended the President, claiming he’s only doing what is best for the country. He believes Trump only wants the US to become the crypto capital of the world and bring in a new age of digital assets. He added that they would deliver the President’s wishes and make that future a reality.

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