U.S. Senate Proposes Strict Rules for Stablecoins, Targets Tech Giants

The latest bipartisan amendment draft of the GENIUS Act, received by the U.S. Senate, has introduced significant regulatory measures aimed at stabilizing the cryptocurrency market. The amendment explicitly prohibits stablecoin issuers from falsely claiming FDIC insurance coverage or endorsement by the U.S. government. It also bars the use of terms such as "United States" or "U.S. government" in the stablecoin's name to prevent consumer confusion.

One of the most notable provisions in the amendment is the restriction on tech giants. Non-financial public companies such as Meta, Amazon, Google, and Microsoft are explicitly prohibited from issuing stablecoins unless they meet strict financial risk, consumer data privacy, and fair business practice standards. This move aligns with the "America First" vision, aiming to separate the banking industry from the monopoly tendencies of Silicon Valley tech companies.

The amendment also enhances enforcement mechanisms. It allows the Treasury Department to suspend the issuer's registration if there is reckless or intentional misconduct. Additionally, it expands the ethical standards coverage for special government employees, including Elon Musk, to ensure consistent application of financial conflict of interest standards. These adjustments are designed to restrict the financial expansion of large tech companies while adding more cumbersome procedures to ensure compliance and consumer protection.

This amendment represents a significant step in regulating the cryptocurrency market, particularly stablecoins, and aims to prevent large tech companies from dominating the financial sector. By imposing strict standards and enforcement mechanisms, the amendment seeks to protect consumers and maintain the integrity of the financial system.