Stablecoin bill clears Senate Banking Committee
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Senate Banking Committee chairman Tim Scott (R-SC). Photo: Al Drago/Bloomberg via Getty Images
The Senate Banking Committee Thursday voted to send a stablecoin bill to the full chamber for debate.
Why it matters: The committee markup on the GENIUS Act was a key step in advancing a stablecoin bill, one of the top digital asset-related priorities for Republican lawmakers in the new Congress.
Driving the news: The committee voted 18-6 to send the bill to the Senate floor, with five Democrats voting yes.
- Though a package of six amendments was approved during the markup, many others presented by Democrats were voted down.
- Democrats expressed frustration on some points, foreshadowing what's likely to come when the bill is debated before the full Senate.
Between the lines: A theme emerged about how blockchains impact law enforcement.
- Republicans contend that it is naturally bolstered by the increased footprint of U.S. dollars and the transparency of blockchain transactions.
- Democrats don't trust that and want to put in tighter rules and more specifics to make sure.
The big picture: Republicans argued Thursday that several amendments proposed for GENIUS were more relevant for a future bill.
- "[This bill] is not a framework to regulate the secondary market," Sen. Cynthia Lummis (R-Wyo.) said. "That topic raises complex policy considerations that we need to discuss in the market structure legislation.
- "We're going from this bill to market structure," she said, referring to broader legislation to establish a regulatory framework for the cryptocurrency market. "We decided to talk about this in a narrow manner, and a number of the things that have been raised will be addressed, but they need to be addressed in market structure."
Zoom in: Among the amendments passed in Thursday's markup was one requiring character and fitness reviews by regulators of any officers or principals of stablecoin issuers, and one preventing issuers from using deceptive names.
- Another addressed bankruptcy, giving super priority to customers over other creditors with respect to stablecoin reserves.
- And one clarified that only government-issued debt can be considered a "similarly liquid asset" for purposes of stablecoin reserve requirements.
- Sen. Mark Warner (D-Va.) stepped in before the vote to say he wouldn't have supported it without the amendments that passed today, which he contends tighten Bank Secrecy Act assurances.
"This is about keeping innovation and opportunity on American soil rather than driving it overseas," Sen. Tim Scott, the committee chairperson, said in the opening.
- "If we are going to have economic supremacy in the world, it requires us to encourage, frankly, innovation before we stifle it with too much oppressive regulation."
What's next: The bill is now in the hands of Senate Majority Leader John Thune (R-S.D.), who will decide when it hits the floor.
