Plans For The Smooth Sailing of Fresh Stablecoin Regulation Have Hit a Curb

Plans for the smooth sailing of fresh stablecoin regulation have hit a curb following a group of Congressmen’s decision to withdraw their support.

A group of 10 US senators will not vote in favor of the updated version of the bipartisan legislation, Guiding And Establishing National Innovation For US Stablecoins (GENIUS Act), to regulate stablecoins, senators announced in a joint statement.

The senators, led by Ruben Gallego, expressed their intent to vote against the bill due to insufficient provisions on anti-money laundering and national security. They also highlighted the need for provisions to protect the local financial ecosystem from undue disruptions.

“While we are eager to continue working with our colleagues to address these issues, we would be unable to vote for cloture should the current version of the bill come to the floor,” the statement concluded.

The senators' decision to withhold their support may affect the bill's chances of passing the Senate before a May 26 deadline.

The updated text of the bipartisan legislation does not adequately address critical concerns regarding anti-money laundering and national security, the senators said.

“We believe that this legislation must include provisions that effectively prevent our financial system from being used for illicit activity, such as narcotics trafficking or the financing of terrorism,” the senators said in the statement.

The senators, a mix of Democrats and Republicans, also expressed concern over the bill's potential to disrupt the U.S. financial ecosystem. They said they are particularly worried about the bill's impact on smaller community banks and credit unions.

“We are mindful of the need to balance innovation with stability, and we do not believe that this bill strikes the right balance in all respects,” the senators said.

The senators also criticized the bill for not including sufficiently stiff penalties for issuers that fail to meet the standards of the GENIUS Act.

“We believe that such penalties are necessary to deter bad actors and ensure compliance with the law,” the senators said.

The senators who signed the joint statement are:

* Ruben Gallego (D-AZ)

* Elizabeth Warren (D-MA)

* A.G. Durbin (D-IL)

* Bob Menendez (D-NJ)

* Ben Cardin (D-MD)

* Bill Hagerty (R-TN)

* Mike Braun (R-IN)

* Toomey (R-PA)

senators will vote for the bill in its current form unless the provisions are modified.