What Happened?
The U.S. Senate Banking Committee has preliminarily passed the U.S. Stablecoin Bill (GENIUS Act) with a vote of 18 to 6. The bill will now be submitted to the Senate for a full vote.
The bill still faces significant opposition, with clear bipartisan divisions evident during the discussions in the Senate Banking Committee.
Bankers have expressed strong concerns regarding the Stablecoin Bill, as the widespread issuance and use of stablecoins could undermine the banks’ market dominance.
U.S. Senate Banking Committee Passes Stablecoin Bill
The U.S. Stablecoin Regulatory Bill (GENIUS Act) has recently made a significant breakthrough in the Senate Banking Committee. The bill, proposed by Republican Senator Bill Hagerty from Tennessee, aims to establish a federal regulatory framework for the issuance of stablecoins in the U.S. The Senate Banking Committee advanced the bill with an 18 to 6 vote, which will soon enter the full Senate voting stage.
However, the advancement of the bill has not been smooth sailing, as clear bipartisan divisions have emerged during the discussions in the Senate Banking Committee.
Democratic Senator Elizabeth Warren, who opposed the bill, pointed out that there are many loopholes within the Stablecoin Bill. She also noted that it comes at a time when rumors are circulating about the Trump family negotiating with Binance to develop a new stablecoin. She stated, “Advancing this bill while Trump is discussing with a company known for illegal practices makes no sense, and it will only lead to regret.”
Another opposing Democratic Senator, Catherine Cortez Masto, criticized Republican committee members for lacking comprehensive examination and debate during the discussions of the bill, asserting that the bill is “not ready” to become formal law.
Supporting the bill, Republican Senator Bill Hagerty, who is also one of the main sponsors, stated that advancing the Stablecoin Bill is a result of bipartisan efforts and that the bill incorporates the opinions of Democrats. He emphasized that this bill will help protect consumers, promote market competition, and encourage innovation.
Hagerty stressed, “It is time to provide the clarity and stability that our country and innovators urgently need.”
What Are Bankers Worried About?
In addition to the opposition, bankers have also shown strong concerns regarding the advancement of the Stablecoin Bill, particularly with respect to the potential “de-banking” issues that stablecoins may bring.
According to a report by American Banker, bankers and their supporters in the Senate are actively applying pressure to try to block the passage of the Stablecoin Bill. They believe that the widespread use of stablecoins will cause banks to lose their market dominance in cross-border payments and fund management, thereby weakening the influence of the traditional banking system.
This wave of opposition has also been echoed by some U.S. Senators. For example, Warren proposed an amendment to prohibit tech companies from issuing stablecoins, stating that if tech companies wish to engage in payment services, they must collaborate with regulated financial institutions, or it would disrupt the current financial order. However, this proposal has sparked intense opposition from Republicans, who emphasize that the issuance of stablecoins can promote competition and drive financial innovation.
Despite these concerns, Brian Moynihan, CEO of one of the largest banks in the world, Bank of America, indicated in a public speech that the bank might enter the stablecoin market by launching its own stablecoin product. This suggests that even though the banking sector has reservations about the development of stablecoins, some banks are actively seeking to incorporate them into their business scope to compete for market share.
Source: Cointelegraph, CoinDesk