Tech Giants May Issue Stablecoins Under New Safeguards
1min read Tech giants Meta, Amazon, Google, and Microsoft may still be able to issue stablecoins under a proposed bipartisan amendment to the GENIUS Act, but only if they comply with a rigorous set of safeguards. According to the bill language, these companies would need to implement robust financial risk controls, strong consumer data privacy protections, and fair business practices before entering the stablecoin market.
The amendment is part of a broader section entitled Banking and Commerce – Protecting Financial Security. This section includes “Master Account Guardrails” meant to ensure that the amendment does not alter current eligibility for Fed access. The revised text also strengthens consumer protections by banning any suggestion that stablecoins are backed by FDIC insurance or by the full faith and credit of the US government. Additionally, stablecoin issuers would be prohibited from using government-associated terms like “United States” or “USG” in the naming of their tokens.
Under the revised framework, the Treasury Department receives expanded authority to suspend issuer registrations for both willful and reckless violations. Each instance of noncompliance could potentially be treated as a separate offense. This move aims to ensure that any company issuing stablecoins adheres to strict regulatory standards, thereby protecting consumers and maintaining the integrity of the financial system.
This development underscores the growing interest and potential involvement of major tech companies in the financial sector. By allowing these giants to issue stablecoins, the amendment could pave the way for new financial products and services, potentially revolutionizing the way people transact and manage their finances. However, the stringent safeguards outlined in the amendment ensure that any entry into the stablecoin market by these companies will be closely monitored and regulated, prioritizing consumer protection and financial stability.
