The US Senate Banking Committee has advanced the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act) with an 18-6 bipartisan vote. This groundbreaking legislation would create the first-ever comprehensive regulatory framework for stablecoins in the United States.
Key Points:
- The bill requires all stablecoins to maintain 1:1 backing with US dollars or highly liquid assets
- Stablecoin issuers must provide monthly liquidity reports and allow instant redemptions
- Companies with over $10B market cap will face Federal Reserve and OCC oversight
- Foreign stablecoins must meet the same standards as US-based ones
Winners and Losers:
US-based Circle (USDC) celebrated the development, with CEO Jeremy Allaire calling it a "huge step towards providing regulatory clarity."
However, Tether (USDT) — the largest stablecoin issuer now based in El Salvador — may face serious compliance challenges. JPMorgan reports suggest Tether's Bitcoin holdings might not meet the bill's strict reserve requirements, potentially forcing a significant BTC selloff.
Reminder About Tether's Control:
It's worth noting that Tether recently froze millions of dollars in user funds at their sole discretion. Their contract allows them to seize funds from any wallet holder at any time. Despite what users might think, USDT holders don't truly control their assets — they belong to users only as long as Tether allows it.
The GENIUS Act would require stablecoin issuers to implement systems for freezing or burning tokens upon regulatory orders, potentially giving Tether even more control over user funds.
What's your take? Will Tether comply with these new regulations, or will they retreat from the US market entirely? Share your thoughts below!
#Stablecoins #TetherControl #CryptoRegulation #USDT #Tether
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