The latest project of the guide and establishment of national innovation of the Stablescoins (engineering) law, presented before a hearing on Tuesday, proposes a significant change in the approach to the supervision of the stable.
The project wishes to divide the regulation of stables-places between state and federal authorities, while introducing new application and transparency requirements for issuers.
The Genius Act is sponsored by senators Bill Hagerty (R-TN), Tim Scott (R-SC), president of the Senate banking committee, Kirsten Gillibrand (D-NY), Cynthia Lummis (R-WY) and Angela Alsobrooks (D-MD). It was introduced for the first time by Hagerty in February.
One of the most notable changes is the increased threshold for the state regulation authority on stablecoins.
States would now be authorized to supervise stable issuers in collaboration with the federal authorities with a market capitalization of up to $ 10 billion, which gives them greater power in the regulations of a larger part of the StableCoin market.
The most recent bill also includes a derogation process, allowing issuers of larger people to remain only under the supervision of the State if they meet the specific criteria.
To obtain an exemption and remain under the supervision of the state, the stablecoin issuers must demonstrate a solid capital, a good assessment and be supervised by what invoices call an experienced state regulator.
The updated bill also presents new transparency and disclosure requirements for issuers. The issuers would be required to publish monthly liquidity reports detailing the composition of their reserves, including the total number of stablescoins in circulation.
As part of the latest version of the invoice, the reserves must be American currency, request deposits, treasury bills or other “approved assets”.
Stablecoin issuers would also be required to create mechanisms that would allow them to comply with the orders to freeze transactions, and grants the secretary of the Treasury the power to block and prohibit transactions involving stablecoins issued by foreign persons or entities.
While the previous versions of the bill had arrangements linked to improved knowledge requirements for your customer (KYC) and money-laminating (LMA), the updated version of the invoice explicitly designates stablecoin issuers as financial institutions for LMA purposes forcing them to establish compliance programs and carry out a reasonable diligence on high value transactions.
The bill is now awaiting changes to the Senate Banking Committee before a reference to the full Senate for the debate and a final vote.
