White House Favors GENIUS Act for Stablecoin Regulation

The White House is currently evaluating two significant legislative proposals aimed at regulating the cryptocurrency industry: the GENIUS Act and the STABLE Act. Both bills seek to address the growing concerns surrounding digital currencies, but they approach the issue from different angles.

The GENIUS Act, which stands for Guiding and Establishing National Innovation For US Stablecoins, is currently being deliberated by the US Senate. The legislation, presented by Senator Bill Hagerty, seeks to provide a robust regulatory framework for stablecoins. The bill requires stablecoin issuers to receive approvals from federal and state regulators and mandates that issuers maintain reserves on a 1:1 basis using acceptable assets. The GENIUS Act is ready for a full vote on the floor of the Upper Chamber following the US Senate Banking Committee’s approval.

In the Lower Chamber, the STABLE Act, which stands for Stablecoin Transparency And Accountability for a Better Ledger Economy, is poised for markup by members of the House Financial Services Committee. The STABLE Act provides for equivalent reserves with full backing while pushing for stringent audits akin to banking institutions. Unlike the GENIUS Act, the STABLE Act seeks to impose the same federal banking regulation on stablecoin issuers, while the GENIUS Act proceeds with a tiered approach.

Insiders suggest that the White House is leaning toward the GENIUS Act over the STABLE Act. The GENIUS Act makes provision for smaller stablecoin issuers to operate at the state level, aligning with the new administration’s stance to promote innovation in the space. Executive Director of the Presidential Working Group on Digital Assets Bo Hines is eyeing stablecoin legislation on Trump’s desk in two months. To meet the deadline, the GENIUS Act is far ahead of the STABLE Act in the legislative process.

However, there remains the possibility of a Conference Committee from both Houses to create a single version of the stablecoin bills. Lobbyists say a Conference Committee will delay the two-month timeline targeted by the White House. There is optimism that if the GENIUS Act receives 70 votes in the Senate, the House of Representatives may adopt the Senate’s version of a stablecoin legislation.

The administration's decision will likely be influenced by a range of factors, including input from industry stakeholders, feedback from regulatory bodies, and the broader economic and political landscape. Ultimately, the White House will need to strike a balance between promoting innovation in the cryptocurrency space and ensuring that the financial system remains stable and secure. The outcome of this decision will have significant implications for the future of digital currencies in the United States.