In 2024, the Senate moved forward with the GENIUS Act, which marks the initial federal regulation of stablecoins, cryptocurrencies pegged to the US dollar. The bill requires issuers to hold reserves for customer cash-outs and prioritizes repayment for stablecoin holders in case of company failures. While these regulations appear reasonable, the crypto lobby, which has heavily invested in political influence, is benefiting from this legislative progress. The act reflects the industry's aim to shape regulations favorably amidst a backdrop of significant financial contributions to politicians, notably towards conservative candidates.
The GENIUS Act is the first federal effort to regulate stablecoins, aiming to require crypto companies to maintain liquid reserves and priority repayment for stablecoin holders.
The crypto industry has become a political behemoth, contributing hundreds of millions to influence lawmakers, favoring a shift towards more conservative politics.
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