S.919 - Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025; GENIUS Act of 2025 (119th Congress)
Summary
The Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025, or GENIUS Act of 2025, aims to regulate payment stablecoins by establishing a framework for their issuance and treatment. It defines key terms, sets requirements for issuers, and outlines supervisory and enforcement mechanisms. The bill also addresses anti-money laundering protections, custody of reserves, and the treatment of stablecoin issuers in insolvency proceedings.
Expected Effects
This act will create a regulatory structure for payment stablecoins, potentially fostering innovation while mitigating risks. The act will also clarify the roles of federal and state regulators in overseeing stablecoin issuers.
Potential Benefits
- Establishes clear regulatory guidelines for payment stablecoins, reducing uncertainty for businesses and consumers.
- Promotes innovation in the digital asset space by providing a pathway for regulated stablecoin issuance.
- Enhances consumer protection through reserve requirements, redemption policies, and disclosure requirements.
- Strengthens financial stability by subjecting stablecoin issuers to capital, liquidity, and risk management standards.
- Improves anti-money laundering and sanctions compliance in the digital asset ecosystem.
Potential Disadvantages
- Increased regulatory burden and compliance costs for stablecoin issuers, potentially stifling innovation.
- Dual federal and state regulatory framework could lead to complexity and inconsistencies.
- Potential for the regulations to be overly restrictive, hindering the growth of the stablecoin market.
- Risk of regulatory capture, where established financial institutions influence the rules to their advantage.
- Possible limitations on individual privacy due to enhanced customer identification and transaction monitoring requirements.
Constitutional Alignment
The Act's regulation of financial instruments falls under the Commerce Clause (Article I, Section 8), granting Congress the power to regulate interstate and foreign commerce. The Act also includes provisions related to penalties for violations, which aligns with Congress's power to enforce laws. The Act appears to align with the Constitution by establishing a regulatory framework for financial activities.
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).