US Senate Advances Stablecoin Bill ‘GENIUS’ Act To Amendment Process

The stablecoin bill is one step closer to becoming the first major crypto regulatory framework in the US following the US Senate’s latest vote to move the bill to the amendment process. Also known as the GENIUS Act, this bill seeks to regulate stablecoins in the US, a move that will further provide clarity for the crypto industry.

US Senate Advances Stablecoin Bill For Consideration

In an X post, journalist Eleanor Terrett revealed that the US Senate voted 69 to 31 to advance the GENIUS Act to the amendment process. This marks a positive step towards passing the bill, which the US Democrats had voted against two weeks ago.

However, the Senate revived the bill through a cloture vote on Monday, voting 66 to 32 in favor of advancing it for a vote on whether to debate it on the floor. Following the vote on Monday, Senator Bill Hagerty, who introduced the bill, said he looks forward to making history with his colleagues by eventually passing the GENIUS Act.

As the Senator explained, if passed, the bill will provide a legal framework that will enable the US financial system to thrive and ensure that America remains the “hotbed” of innovation globally.

Ahead of passing the stablecoin bill, Ripple is looking to dominate the stablecoin market through a possible acquisition of Circle, which issues the second-largest stablecoin by market cap. As CoinGape reported, Circle is allegedly in talks with Ripple and Coinbase for a potential sale, while also planning an IPO.

Meanwhile, it is worth mentioning that the GENIUS Act would still have to pass through the US House if the Senate eventually votes in favor of making it law. As such, it remains unclear when the bill could reach Donald Trump’s desk for assent.

The Implications Of Barring Interest Payments On Stables

In an X post, expert Omid Malekan explained why the US Senate’s decision to bar interest payments on stablecoins in the GENIUS Act could lead to economic and political disaster.

First, he noted that onshore stablecoins already have the permission but pay no interest, while offshore regulated stablecoins have approval but pay interest. He further remarked that tokenized money market funds, which are similar, also pay interest.

He added that all three are backed by US Treasuries and earn interest income from these Treasuries. As such, the interest income from all three comes from the American Taxpayer.

Malekan outlined the second implication of the stablecoin bill’s bar on interest payments. He noted the trillions in interest payments that American Taxpayers fund yearly, with a significant amount now going to stablecoin issuers.

However, due to the legal restrictions imposed by Congress to protect the major banks, the expert stated that the interest that American Taxpayers pay to domestic issuers cannot go to American Taxpayers. Meanwhile, foreign stablecoin issuers will continue to pay interest to foreign stablecoin holders, which taxpayers basically fund.

Lastly, Malekan argued that as stablecoins continue to grow and disintermediate payments and banking, it would become increasingly clear that American Taxpayers are the “simp” of this new system, which the GENIUS Act aims to introduce.

While it remains uncertain if the stablecoin bill will eventually pass, XRP lawyer John Deaton has warned that failure to pass it means that other crypto laws are unlikely to pass before the midterms.

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Boluwatife Adeyemi

Boluwatife Adeyemi is a well-experienced crypto news writer and editor who has covered topics that cut across several topics and niches. Boluwatife has a knack for simplifying the most technical concepts and making it easy for crypto newbies to understand. Away from writing, He is an avid basketball lover, a traveler and a part-time degen.

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