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Congress has made a significant move in advancing the digital asset regulatory landscape by passing the GENIUS and CLARITY Acts. The legislation aims to provide clarity and guidance for the burgeoning sector.
In a decisive 307-122 vote, the House of Representatives approved the GENIUS Act. This critical piece of legislation establishes a federal framework for the issuance and supervision of payment stablecoins. Notably, the bill directs the Federal Reserve to register and examine insured depository institutions at the national level, allowing state-chartered entities to issue dollar-backed tokens under strict reserve, disclosure, redemption, and risk-management standards.
The GENIUS Act also stipulates that issuers must hold high-quality liquid assets, such as cash, Treasury bills, and short-duration government securities, equal to their token liabilities. Furthermore, it mandates reporting at set intervals and segregates assets to ensure that issuers cannot rehypothecate backing assets without explicit customer consent.
Concurrently, the House approved the CLARITY Act by a 294-134 vote, which defines jurisdictional boundaries for digital asset trading venues listing tokens meeting functional tests, excluding securities laws. This bill requires platforms to list qualifying tokens, trade spot and derivatives under coordinated custody standards, and submit token disclosure packets that scale with market capitalization tiers.
The GENIUS Act is set to be reviewed by the Senate as the next step in the process. Meanwhile, President Donald Trump, who received the bill, plans to sign it into law on July 18.
These regulatory developments signal a significant shift in the landscape for digital assets, offering clarity and predictability for stakeholders. The move reflects growing concerns over market stability and consumer protection, highlighting the need for stringent oversight mechanisms.
Galaxy Digital Asset Management, Venture Capital in North America Galaxy (TSX: GLXY) is a digital asset and blockchain leader providing access to the growing digital economy.
Source: cryptoslate.com
