The Senate Banking Committee today voted 18-6 in favor of a bill that would create a regulatory framework for payment stablecoins, with the legislation receiving support from all committee Republicans and some Democrats.
The Guiding and Establishing National Innovation for U.S. Stablecoins, or GENIUS, Act [S.394] would establish procedures for institutions seeking licenses to issue stablecoins, implement reserve requirements and create “light-touch, tailored regulatory standards” for stablecoin issuers, according to a summary by the bill’s sponsors.
While the bill has received bipartisan support, some committee Democrats — including Ranking Member Elizabeth Warren (D-Mass.) — said it could provide a loophole for bad actors to evade sanctions and anti-money laundering laws, and could harm banks by allowing people to park their money in stablecoins rather than deposit accounts. Committee Chairman Tim Scott (R-S.C.) and other supporters put forward an amendment they said addresses several of those concerns and said the legislation was needed for the U.S. to remain a leader in technological innovation.
The American Bankers Association has not taken a stance on the legislation. Still, in comments to the committee, the association noted the bill contains several provisions it supports, including language codifying the repeal of a Securities and Exchange Commission staff bulletin on how banks were expected to account for digital assets held in custody. ABA also identified three principles to guide a framework on payment stablecoins: Regulation should avoid a negative economic impact, control for known risk and prepare for unknown risks.
In a statement, ABA President and CEO Rob Nichols said the association continues to look forward to working with members of Congress on the legislation “to ensure that the GENIUS Act delivers a durable regulatory framework around stablecoin as this important bill moves to the floor.”
“We appreciate many of the changes that have been made to the legislation since its initial draft was shared and remain hopeful that any final legislation will avoid incentivizing a flow of deposits out of the banking system and protect the fundamental role that banks play in intermediating credit and powering the economy,” Nichols said. “We appreciate the bill sponsors’ willingness to hear the perspective of America’s banks and the customers and communities they serve.”
