US Congress passes landmark crypto bill—Why it's a big deal
What's the story
The US Congress has passed its first major national cryptocurrency legislation, a historic move for the industry. The bill, known as the Genius Act, establishes a regulatory framework for stablecoins, cryptocurrencies backed by reliable assets like the US dollar. President Donald Trump is expected to sign it into law today after both chambers of Congress approved it yesterday, following the Senate's approval of the measure last month.
Legislative details
Bill mandates stablecoins be backed 1-for-one with US dollars
The Genius Act is one of three crypto-related bills supported by Trump. The legislation aims to provide clear guidelines for the expanding industry, ensuring that the US keeps up with payment system advancements. It mandates that stablecoins be backed one-for-one with US dollars or other low-risk assets, a move seen as an effort to bring digital currency into the mainstream.
Opposition voices
It legitimizes stablecoins without adequate consumer protections
Despite its support, the bill has drawn criticism for potentially introducing new risks into the financial system. Critics argue that it legitimizes stablecoins without adequate consumer protections and could deepen tech firms' involvement in bank-like activities without subjecting them to similar oversight. They also raised concerns about leaving customers vulnerable in a complex bankruptcy process if a stablecoin firm fails.
Proponents' perspective
Supporters say bill will bring digital currency into mainstream
Supporters of the Genius Act argue that it could encourage more people to use digital currency, thus bringing it into the mainstream. The bill has garnered significant support from Democrats and most Republicans, despite some concerns over its provisions. A coalition of consumer and advocacy groups had warned earlier this year that passing such a bill would allow "the proliferation of assets that consumers will wrongly perceive as safe."
Legislative outlook
Other 2 crypto-related bills also gaining momentum
The other two crypto-related bills, which would prevent the US central bank from creating a digital currency and establish a regulatory framework for other cryptocurrencies, have passed the House and are headed to the Senate. Trump's administration is also said to be working on an executive order allowing retirement accounts to invest in private assets like crypto, gold, and private equity.