The U.S. Senate is expected to vote on the GENIUS Act this week, a significant piece of stablecoin regulation anticipated to become law within months, according to a research report from Wall Street broker Bernstein.
Stablecoins are cryptocurrencies pegged to assets such as the U.S. dollar or gold. They are integral to the cryptocurrency ecosystem, serving as a payment infrastructure and facilitating international money transfers.
Bernstein forecasts that after the GENIUS Act passes, stablecoins will transform from being the financial backbone of crypto markets to becoming the primary money rail for the entire internet.
The full title of the legislation is the Guiding and Establishing National Innovation for U.S. Stablecoins Act. It aims to revive stablecoin innovation within the U.S., providing an advantage to regulated domestic issuers.
- The act requires federal oversight of stablecoins with market capitalizations exceeding $10 billion.
- States may also regulate stablecoins if their rules align with federal guidelines.
- Stablecoins are classified as digital cash to encourage broader adoption for payments beyond crypto asset settlements.
The bill restricts non-financial public companies from becoming stablecoin issuers, a move highlighted by Bernstein following reports of Amazon and Walmart exploring stablecoin use.
Consequently, e-commerce and technology firms seeking to utilize these cryptocurrencies will likely need to partner with regulated U.S. issuers rather than creating proprietary stablecoins.