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- Senate to vote on the GENIUS Act, setting the first U.S. regulations for stablecoins after previous concerns.
- A new bill limits Big Tech firms like Meta from issuing stablecoins without approval to avoid market dominance.
- Progressives warn the bill may allow Trump-linked crypto firms to gain more power and profit.
The Senate is scheduled to vote Monday night on moving forward with the GENIUS Act, which would create laws regulating stablecoins for the first time in the U.S. This came after Democrats had concerns about potential weaknesses in the initial bill and rejected it a few weeks ago. While the changes in the new bill are expected to fix some matters, many key lawmakers are still opposed to it.
The bill now includes a provision that makes it necessary for Meta and other Big Techs to get approval before they launch stablecoins. The regulation was put in place because it was thought large tech firms might take over the market. On the other hand, some progressives such as Senator Elizabeth Warren are saying the bill would allow more corruption from Trump-based cryptocurrencies.
GENIUS Act’s Consumer Protections
Warren is concerned about the relationship between the Trump family and World Liberty Financial, which just introduced USD1 as a stablecoin. She notes that this bill could create more profit for those groups, giving them more room to manipulate the situation. Democratic politicians who are certain about their views are concerned about what the bill might achieve.
According to the GENIUS Act, issuers would be required to keep safe assets like U.S. Treasury bills in reserves. There are also plans to handle anti-money laundering and prioritize consumers’ interests when a bank faces bankruptcy. They are introduced to strengthen stablecoins which have now become an important part of the growing $3.3 trillion crypto market. The law would directly alter the operations of USDT and USDC from Tether and Circle.
Stablecoin Concerns in Banking
Democrats are worried that stablecoins will let companies in the tech sector enter banking without significant regulation. Alternatively, those supporting the crypto industry argue that the GENIUS Act is essential for upgrading the financial system in the United States. They consider that having strong regulations will promote digital assets’ growth. And decrease the worry about more confusion in the market.
According to industry groups, if the bill is not passed. It will take longer for important regulations to be established for crypto exchanges and token issuers. The crypto market will continue to face challenges because there are no firmly established rules.
Even though passing the bill in the House may be assured, nothing is certain for the Senate just yet. Stricter rules for cryptocurrency and higher attention on President Trump’s ties to crypto could affect the chances of the legislation passing.
