The GENIUS Act is about to be passed, here is a detailed interpretation!

The full name of the GENIUS Act is the Guiding and Enabling National Innovation in U.S. Stablecoins Act. It will face an important vote in the U.S. Senate tonight. If the Senate can pass the vote successfully, the bill will be submitted to the House of Representatives for deliberation. Since the House of Representatives has a low threshold for approval, in fact, as long as the bill passes the Senate, the possibility of passing the House of Representatives is very high, and then it will eventually be signed by the President to become law.

The challenge the bill currently faces in the Senate is that it needs to obtain at least 60 votes to pass, which requires the support of at least seven Democrats.

The betting point for tonight's Senate vote is whether the crypto-friendly Democratic lawmakers led by Kirsten Gillibrand and Angela Alsobrooks can cast a crucial vote. If they can successfully persuade 7 Democrats to vote, the probability of the bill's final passage will be greatly increased.

Republicans are currently trying to pass the bill before Memorial Day on May 26.

The bill failed in Congress two weeks ago, when crypto-friendly Democratic lawmakers raised questions along three lines:

1. Consumer Protection

2. Anti-money laundering

3. Regulatory conditions for Tether and other foreign stablecoins

As for other Democrats, the main political factor in opposing the bill is the Trump family's multiple investments in the crypto field. They believe that their family and Trump himself are beneficiaries, and they are trying to propose the addition of a regulatory bill that prohibits the president and senior officials from profiting from cryptocurrency investments while in office.

The main contents of the current revised version of the GENIUS Act are:

1. The regulatory mechanism is divided. Stablecoins with assets exceeding 10 billion are regulated by the Fed, while stablecoins with a market value of less than 10 billion are self-regulated by the states. This bill is intended to limit the issuance of more stablecoins by each state in the United States, which would cause regulatory chaos.

2. Specific requirements for asset support. All stablecoins must be fully backed by highly liquid assets such as the U.S. dollar or U.S. Treasury bonds to ensure the stability of their value. This rule actually stipulates that stablecoins must be anchored at two points in the future - the U.S. dollar and U.S. Treasury bonds. The relationship between the U.S. dollar and U.S. Treasury bonds complement each other. This clause basically limits the main anchoring object of future stablecoins to U.S. Treasury bonds. If the bill is passed, the future issuance of stablecoins means buying U.S. Treasury bonds, which is also one of the effective solutions for the U.S. government to solve financing difficulties.

3. Prohibit misleading and exaggerated propaganda, and explicitly prohibit stablecoin issuers from falsely claiming that their products are insured by the Federal Deposit Insurance Corporation (FDIC) and backed by the credit of the U.S. government.

Separate from the insurance credit and government credit of the United States to prevent damage to the credit of federal insurance or the US government in the event of a financial crisis or a stablecoin crisis.

4. Restrictions on technology companies, such as Tesla, META Amazon, Google and Microsoft, which are large non-financial technology companies that issue stablecoins. If such companies issue stablecoins, they will have to put forward higher requirements. This move is to restrict technology companies from using their Internet influence and user base to promote their own stablecoins. In the name of anti-monopoly, it is actually to firmly control the right to issue coins in the traditional financial system.

This bill amends and supplements

1. Consumer protection mechanism,

2. Bankruptcy protection mechanism,

3. Ethical standards, expand the ethical standards for senior government officials, especially supervision of Trump and his family, as well as famous businessmen like Musk.

The three supplementary bills are intended to enhance the security of industry regulation and increase investors' confidence in investment. Consumer protection laws and bankruptcy protection mechanisms are added for this purpose.

Of course, I personally feel that the improvement of moral standards is too lenient. Moral standards are different from legal standards. In comparison, moral standards appear to be a little more relaxed.

Analysis and evaluation: Overall, the revised bill has strengthened regulatory transparency and investor protection, making the bill more complete, but ethical standards and anti-money laundering do not seem to be completely clear. It is uncertain whether the current bill can win the approval of Democratic crypto-friendly lawmakers. If the Democratic Party is still obsessed with the possibility of large-scale profits from Trump and his family's frequent investments in the crypto field, there may be enough reasons to reject it again.

Of course, by paying attention to the entire bill, if it is passed, it will inevitably greatly ease the financing pressure and bond market pressure of the US government in the future, but this may directly benefit Trump's term. I don't know whether the Democratic Party will compromise on this.

The bill may be good for the future of the US government, but will the Democrats allow it to pass during Trump's term? This is a huge challenge.

If the bill is passed, overseas stablecoin issuers such as Tethe will face greater challenges in the short term. Not all of Tethe's assets are US dollars and US bonds, which may require Tethe to adjust its balance sheet.

At present, it may be inevitable for the United States to control #Crypto in the future. This is the general trend and it seems that it cannot be changed for the time being. For the crypto market, the increase in the issuance of stablecoins with the support of the United States in the future will also greatly stimulate the liquidity of the financial market to enter the Crypto market. It can be regarded as a long-term positive return. Judging from the current trend of #Bitcoin , although I think the current rise of BTC has nothing to do with the bill for the time being, BTC can continue to maintain a high level after the U.S. stock market closes. It should be waiting for the passage of the bill and going to sleep. Let's see the result when we wake up!