A highly anticipated bill has crossed an opposition to the Senate to bring a key element of cryptography closer to one more and more the law.
The bill advanced in a procedural vote which collected bipartisan support two weeks after the Democrats fell into the proposed legislation.
The early opposition feared that the bill would allow conflicts in the cryptographic transactions of President Donald Trump, who made a meticulous exam on both sides of the aisle. While some Democrats continued to resist the bill this week firmly, a modified version was advanced during a vote of 66-32.
With the Genius Act is now heading for a debate on the Senate soil, here is what the legislation aims to accomplish
Wider monitoring of an increasing cryptography space
The main objective of the bill is to provide clearer rules for stable transmitters, which are tokens set for fiduciary currencies like the dollar.
If adopted, transmitters will have to comply with stricter standards, including regular disclosure of reserves. Stablecoins must be supported 1: 1 by liquid reserves such as fiduciary currency or other liquid assets such as treasures.
Meanwhile, federal and state regulators would be required to provide capital management, liquidity and risks rules for issuers who fall under their surveillance.
An entity can emit stablecoin as long as it is eligible at the federal or state level, and does not offer yield on its stablecoin. Banks, credit cooperatives and non-banks could become stablecoin issuers by registering with the appropriate federal regulator, as long as they meet the reference requirements.
The law is also focusing on consumer protection and anti-flowing efforts. This including payment transmitters abroad abroad to offer tokens in the United States, unless it can comply.
New changes
Tuesday, reports indicate that the modified version of the act nailed to concessions to mitigate the partisan concerns concerning conflicts of interest and great technology.
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However, some of the changes are not below the fact that the initial opposition among the Democrats had targeted.
For example, the modified bill would prohibit senior executive branches from launching stablecoins, but the American president and vice-president would remain exempt. This effectively maintains the door open to Trump, the family of which has been involved in the space of Stablescoin.
A company supported by the Trump family, World Liberty Financial, has already published a Stablecoin this year.
The reports also note that Big Tech would be prevented from issuing tokens if they followed the financial data of users, but companies could effectively get it if consent is given by a service agreement.
According to Politico, other modifications granted included expanded limitations on interest stalls and reinforced provisions on the whitening of the fight against money laundering, national security and consumer protection, which stuck points for democrats when the bill obtained a dead point two weeks ago.
