A group of US Senate Democrats known for their support of the cryptocurrency industry have recently expressed opposition to a stablecoin bill proposed by Republican Senator Bill Hagerty. The Democrats have raised concerns about the current form of the bill and have stated that they will not support it unless significant changes are made.
The bill in question, officially titled the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, aims to establish the first regulatory framework for stablecoins in the United States. It had previously received backing from Senators Ruben Gallego, Mark Warner, Lisa Blunt Rochester, and Andy Kim when it passed through the Senate Banking Committee in March.
However, in a joint statement, nine Senate Democrats, including the aforementioned senators as well as Raphael Warnock, Catherine Cortez Masto, Ben Ray Luján, John Hickenlooper, and Adam Schiff, highlighted several key issues with the bill that they feel need to be addressed. These issues include concerns related to Anti-Money Laundering measures, national security, foreign issuers, and accountability for noncompliant actors.
Despite their reservations, the Democratic senators emphasized their commitment to working on responsible crypto regulation and expressed a willingness to collaborate with their colleagues to address the identified issues.
The Democrats' stance reflects a growing unease within the party regarding the regulatory framework for stablecoins and highlights the complexities involved in drafting legislation that satisfies all stakeholders in the cryptocurrency industry.
The Senate is set to begin floor consideration of the bill in the near future, with the first vote potentially taking place in the coming week. The outcome of these deliberations will have significant implications for the future of stablecoin regulation in the United States and could shape the landscape for crypto businesses operating within the country.
Meanwhile, industry experts like Caitlin Long, founder and CEO of Custodia Bank, have criticized the US Federal Reserve for maintaining policies that favor big-bank-issued stablecoins while restricting banks from directly engaging with cryptocurrencies. Long has called for swift action from Congress to pass a federal stablecoin bill that could potentially override the Fed's current stance and provide much-needed clarity and guidance for the cryptocurrency industry.
As the debate over stablecoin regulation continues to unfold, it is clear that finding a balance between innovation and oversight in the crypto space remains a complex and challenging task for policymakers and industry stakeholders alike.
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