Progress Made on the U.S. Stablecoin Bill, but Faces Multiple Challenges

On May 20th, Beijing time, the U.S. Senate voted 66 in favor and 32 against to pass the motion to terminate debate on the GENIUS Act stablecoin bill. Although the bill itself has not yet passed, this result clears a phased hurdle for the final legislation. The next step for the GENIUS Act will be to enter the full Senate debate and amendment process.

Since the bill was officially introduced on February 4, the text has undergone multiple revisions. The new version adds more provisions related to anti-money laundering, consumer protection, and custody, while also imposing restrictions on tech giants issuing stablecoins. The process of advancing the bill has also showcased the key negotiations between bipartisan legislators on the issue of stablecoins.

Earlier this year, the U.S. President publicly stated that a regulatory framework for stablecoins and market institutions is expected to be introduced before the August congressional recess. If this important bill is ultimately passed, it will become the first federal-level legislation on stablecoins in the United States, and its impact should not be underestimated.

Core Content and Amendments of the Bill

The core content of the GENIUS Act includes:

1. Define payment stablecoins as digital assets used for payments or settlements, requiring 1:1 backing fully supported by US dollars or other high-quality liquid assets.

2. Establish a clear application process for issuance licenses, introduce a "dual regulatory framework", and allow issuers to choose to register at the state or federal level.

3. Require the stablecoin issuer to maintain a 1:1 reserve ratio, using high-quality liquid assets as reserves, and conduct monthly certifications.

4. The issuer must publicly disclose the reserve assets and redemption policy.

5. Classify stablecoin issuers as financial institutions under the Bank Secrecy Act, which must fulfill comprehensive anti-money laundering obligations.

6. Specify that stablecoin holders are prioritized for repayment in the event of the issuer's bankruptcy.

7. It is clear that the payment of stablecoins is not considered as securities, commodities, or investment companies.

The new version also introduces the "Stablecoin Certification Review Committee", responsible for assessing whether state regulatory systems meet federal standards. In addition, the bill sets conditions for foreign stablecoin issuers operating in the United States and requires technology companies to implement strict financial risk control and consumer data protection measures before entering the stablecoin market.

Legislative Process and Controversial Issues

After the GENIUS Act passes the motion to terminate debate in the Senate, it will enter a comprehensive debate and amendment stage, followed by a vote in the House of Representatives. If both chambers pass the bill, it must be signed by the President to officially become law.

During the process, lawmakers had disputes over certain provisions. Some Democratic senators believe that the bill still has shortcomings in areas such as anti-money laundering, national security, and accountability mechanisms. Another focus is the possibility of tech giants issuing their own stablecoins.

In addition, the interests involved in certain projects have also sparked controversy. Ultimately, bipartisan senators reached a consensus on the issue and removed provisions targeting specific cryptocurrency projects. The amended bill places greater emphasis on regulating the entire stablecoin sector rather than focusing on individual projects.

Potential Impacts and Future Challenges

If the GENIUS Act ultimately becomes law, it will have a profound impact on the stablecoin market. It may drive industry consolidation, enhance consumer trust, and attract institutional investors. However, the new regulations may set more hurdles for non-financial tech companies to issue stablecoins.

Despite progress on the bill, it still faces some challenges. For example, the issue of interests in certain crypto projects remains an unresolved problem. According to the latest public version, the bill does not explicitly restrict certain individuals from participating in crypto projects, and this loophole may become a focal point of future debates.

The U.S. Treasury Secretary has warned that the lack of a unified federal regulatory framework could lead to the development of stablecoins amid fragmented state regulations, which is detrimental to the U.S. maintaining its global leadership and may push digital asset innovation overseas.

Overall, the GENIUS Act stablecoin bill, although not formally signed into law, has paved the way for legislation with the successful motion to end debate. If it can pass through smoothly, the bill will not only become the first federal-level stablecoin regulatory framework in the United States but may also reshape the entire landscape of the stablecoin market.