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U.S. Takes Lead in Crypto Regulation with GENIUS and CLARITY Acts
In a groundbreaking move, the United States has taken the lead in crypto regulation by passing the GENIUS Act and awaiting further Senate review for the CLARITY Act. These legislative measures aim to establish a comprehensive regulatory framework for digital assets, setting new standards for stablecoin compliance and sector oversight.
The introduction of the GENIUS Act introduces stringent requirements for stablecoin issuers, emphasizing a two-tier licensing system. Issuers with under $10 billion in market capitalization can opt for a state-level license, while larger entities must secure a federal license, overseen by federal banking regulators. This new law mandates that all stablecoins be fully backed by high-quality, liquid assets, with monthly reserve disclosures and annual financial filings for larger issuers.
Additionally, the GENIUS Act categorizes stablecoin issuers as financial institutions under the Bank Secrecy Act, obligating them to implement anti-money laundering (AML) and Know Your Customer (KYC) programs. Furthermore, it calls for a study and guidance from FinCEN within three years, focusing on innovative methods to detect illicit finance and manage risks associated with decentralized finance protocols.
The CLARITY Act is poised to clarify jurisdictional boundaries between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). This act assigns the CFTC exclusive jurisdiction over digital commodities while the SEC will oversee digital securities. It seeks to eliminate ambiguity by establishing criteria to distinguish between different types of digital assets.
Moreover, the CLARITY Act proposes a market structure framework that includes mandatory registration for market intermediaries, standards for custody and consumer protections, and guidelines for “sufficient decentralization.” These measures aim to foster a safer and more transparent digital asset marketplace.
By implementing these legislative measures, the United States has positioned itself alongside other nations, such as Europe with its Markets in Crypto-Assets (MiCA) regulation, Singapore, and Japan, which have established stringent rules for the sector.
Source: Blockchain.News
