With the Stablecoin Bill aka GENIUS Act

With the stablecoin bill aka GENIUS Act

A new bill is set to pass through the US Senate, which could see the biggest names in banking join forces to create a joint stablecoin venture. According to a recent report by The Wall Street Journal, top-tier banking institutions like Wells Fargo, Bank of America, JPMorgan Chase, and Citigroup are currently evaluating the possibility of a joint collaboration for a stablecoin project.

As the bill, titled the “GENIUS Act,” continues its journey through the Senate, commercial banks are already preparing for the next big opportunity in the stablecoin market. These developments have sent jitters through the crypto market, especially to Circle’s USDC, which saw its dollar-peg fumble a bit, slipping to $0.9987 earlier today.

The report by the WSJ notes that the initiative is still in its early stages of planning, and there's no guarantee it will materialize. A big focus of the report is also on the competitive threat posed by big tech firms and retailers, pushing institutions to adapt quickly or risk losing their payments and deposit base.

This new legislation would create a legal framework specifically tailored for stablecoins, aiming to provide the necessary structure for the seamless integration of cryptocurrencies into the broader financial system.

The bill, which stands for "Genuine Economic Recovery and Integration, U.S. Services, and Small Business Act," is set to be voted on by the full Senate soon. It includes provisions that permit national and state-charted banks, as well as nonbanks with assets exceeding $50 billion, to apply for permits to issue stablecoins, provided they maintain complete backing by U.S. dollars in a dedicated account at a Federal Reserve Bank.

The bill would also restrict public companies outside the financial sector, like Apple or Google, from engaging in stablecoin activities.

The initiative to introduce a USD-backed stablecoin on the Ethereum blockchain also comes from France’s Société Générale, highlighting the broader interest in exploring this avenue for cost-effective and rapid payments, especially for cross-border transactions.