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Congress has made significant progress in the development of digital asset regulations by moving forward with two key acts – GENIUS and CLARITY. These bills aim to provide a comprehensive framework for the issuance and supervision of payment stablecoins.
The GENIUS Act establishes a federal framework for the regulation of payment stablecoins, directing the Federal Reserve to register and examine insured depository institutions at the national level. This would allow state-chartered entities that meet specific reserve, disclosure, and risk-management standards to issue dollar-backed tokens. To ensure accountability, issuers must hold high-quality liquid assets equal to their token liabilities and report attestations at set intervals.
Additionally, the bill instructs banking regulators to establish an examination schedule and sets rules for consumer redemption rights at par within limited time windows. Furthermore, GENIUS Act establishes segregation rules that require issuers to obtain specific customer authorization before rehypothecating backing assets.
The CLARITY Act defines jurisdictional lines for digital asset trading platforms that list tokens meeting functional tests that fall outside the scope of securities law. This bill would allow these platforms to list qualifying tokens, trade spot and derivatives under coordinated custody standards and file token disclosure packets scaling with market capitalization tiers.
Notably, issuers selling tokens to US persons must submit initial information statements. Finally, the CLARITY Act instructs banking supervisors to recognize qualified custodians that hold both stablecoins and non-stable digital assets under shared segregation and audit rules.
The House has passed the GENIUS Act in a 307-122 vote and sent it to President Donald Trump for signature. The President plans to sign the bill into law on July 18.
Source: cryptoslate.com
