A landmark crypto bill just advanced in Congress. Here's what it aims to do.
Capitol Hill.
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  • The crypto-focused GENIUS Act advanced in a procedural vote in the Senate Monday night.

  • The bill aims to create the first regulatory framework for stablecoins, a growing corner of the crypto market.

  • Holdouts among Democrats won some concessions, including tighter rules for potential token issuers.

A long-anticipated stablecoin bill has broken through Senate opposition to bring a key piece of crypto legislation one step closer to becoming law.

The bill advanced in a procedural vote that garnered bipartisan support two weeks after Democrats balked at the proposed legislation.

Early opposition feared that the bill would enable conflicts in President Donald Trump's crypto dealings, which have drawn scrutiny on both sides of the aisle. While some Democrats continued to staunchly resist the bill this week, an amended version was moved forward in a 66-32 vote.

With the Genius Act now headed for debate on the Senate floor, here's what the legislation is aiming to accomplish

Broader oversight of a growing crypto space

The bill's core purpose is to provide clearer rules for issuers of stablecoins, which are tokens pegged to fiat currencies like the dollar.

If passed, issuers will need to adhere to stricter standards, including regular disclosure of reserves. Stablecoins will need to be backed 1:1 by liquid reserves like fiat currency or other liquid assets like Treasurys.

Meanwhile, federal and state regulators would be required to provide capital, liquidity, and risk management rules for issuers that fall under their oversight.

An entity can issue a stablecoin as long as it qualifies on the federal or state level, and does not offer a yield on its stablecoin. Banks, credit unions, and nonbanks could become stablecoin issuers by registering with the appropriate federal regulator, as long as they meet baseline requirements.

The act also focuses on consumer protections and anti-money laundering efforts. This including barring foreign payment stablecoin issuers from offering tokens in the US, unless it can comply.

New changes

Reports on Tuesday state that the amended version of the act tacked on concessions to ease partisan concerns about conflict-of-interest and Big Tech.

However, some of the changes fall short of what the initial opposition among Democrats had been been aiming for.

For instance, the amended bill would prohibit top executive branch officials from launching stablecoins, but the US president and vice president would remain exempt. This effectively keeps the door open for Trump, whose family has grown involved in the stablecoin space.