S.1582 - Guiding and Establishing National Innovation for U.S. Stablecoins Act; GENIUS Act (119th Congress)
Summary
The GENIUS Act (S.1582) aims to establish a regulatory framework for payment stablecoins in the United States. It defines key terms, sets requirements for issuers, and assigns regulatory authority to federal and state agencies. The bill seeks to balance innovation in digital assets with consumer protection and financial stability.
Expected Effects
The act will create a licensing and supervisory regime for stablecoin issuers, potentially leading to greater market confidence and wider adoption of stablecoins as a means of payment. It could also lead to increased compliance costs and barriers to entry for smaller players in the digital asset space.
Potential Benefits
- Increased consumer protection through reserve requirements and redemption policies.
- Enhanced financial stability by regulating stablecoin issuers and mitigating risks.
- Clarity and legitimacy for payment stablecoins, potentially fostering innovation within a regulated framework.
- Prevention of illicit activities through Bank Secrecy Act compliance and anti-money laundering measures.
- Interoperability standards promoting compatibility within the digital finance ecosystem.
Potential Disadvantages
- Potential barriers to entry for smaller companies due to compliance costs and regulatory hurdles.
- Possible limitations on innovation due to strict regulatory requirements.
- Risk of over-regulation stifling the growth of the stablecoin market.
- Extraterritorial reach potentially impacting foreign payment stablecoin issuers.
- Potential for increased surveillance and reduced privacy due to AML requirements.
Constitutional Alignment
The bill's alignment with the Constitution is primarily based on Congress's power to regulate commerce (Article I, Section 8). The regulation of stablecoins, which are used in financial transactions, falls under this power. The bill also addresses issues related to monetary policy, which is an implied power of Congress. However, concerns about individual privacy (Amendments IV and V) may arise from the extensive data collection and reporting requirements.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).