A sweeping new piece of legislation introduced in the U.S. Congress, known as the GENIUS bill, could dramatically reshape the stablecoin landscape by tightening restrictions on issuers and barring misleading government associations.
According to cryptocurrency journalist Eleanor Terrett, the bill is designed to protect consumers while keeping federal agencies from backing or becoming involved in stablecoin projects.
Ban on Government-Linked Branding
One of the bill’s standout provisions would prohibit stablecoin issuers from using phrases such as “United States,” “United States Government,” or “USG” in their product names. The measure aims to reduce consumer confusion and stop projects from appearing falsely affiliated with federal backing.
In a similar vein, claims of FDIC insurance or any association with the “full faith and credit” of the U.S. government would be explicitly banned. Issuers would face penalties for suggesting that their stablecoins enjoy federal guarantees.
Tech Giants Face Barriers to Entry
The legislation also targets major technology firms, including Amazon, Meta, Google, and Microsoft. These companies would be barred from issuing stablecoins unless they are registered financial institutions. The bill requires such firms to meet stringent criteria for financial risk management, data privacy, and fair competition—effectively reinforcing the separation between commerce and banking.
Bankruptcy Protections and Enforcement Measures
To safeguard consumers, the GENIUS bill introduces new protections for those holding stablecoins if issuers go bankrupt. It also authorizes the U.S. Treasury Department to suspend or revoke registrations of issuers found guilty of willful or negligent misconduct—a significant expansion from previous drafts, which only targeted intentional violations.
Additionally, the bill imposes strict penalties for illegal transactions conducted through noncompliant exchanges, reflecting a broader push to crack down on regulatory evasion in the crypto industry.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
Source: https://coindoo.com/genius-bill-targets-stablecoin-market-with-new-restrictions-on-big-tech-and-misleading-claims/