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THUNE SIGNALS GOP WILLING TO COMPROMISE ON STABLECOIN BILL AS SENATE VOTE NEARS
Senate Republicans back off fast-track push as Thune opens door to Democratic demands ahead of GENIUS Act floor vote.
▪️ Senate Majority Leader John Thune signaled openness to Democratic amendments on the GENIUS Act ahead of a key floor vote.
▪️ The move comes after nine Senate Democrats issued a joint statement opposing the bill without stronger safeguards.
▪️ Republicans need at least seven Democratic votes to advance the legislation, which would create a federal framework for stablecoins.
Senate Majority Leader John Thune (R-SD) has acknowledged that Republicans would need to seek a more open stance with Democrats if the party hopes to advance the U.S.’s first comprehensive federal regulatory framework for dollar-pegged digital assets.
With a full floor vote looming on the GENIUS Act before Congress’ August recess, pressure for a compromise is mounting as partisan tensions surrounding the landmark legislation threaten to boil over.
“Changes can be made on the floor for sure,” Thune said, speaking to reporters from Congress on Monday, as first quoted by Politico. Thune said he’s “waiting to see what it is [Democrats] are asking for.”
Thune’s gesture shows the GOP is dialing back and slowing down from Sunday, when he initiated expedited procedures to advance the bill.
Republican leaders had hoped to hold a vote as early as Thursday this week.
But those plans hit a roadblock after nine Senate Democrats, including four previously open to the bill in committee, released an opposing statement a day before it was expedited.
The Democrats cited the need to add “stronger provisions“ on key issues, including anti-money laundering, foreign issuers, national security, financial safety, and accountability.
Despite holding 53 Senate seats, the Republican caucus needs to secure at least seven Democratic votes to overcome the last hurdles for passage.
What’s at stake?
The GENIUS Act allows nonbank stablecoin issuers to operate in the U.S. economy, providing key protections for consumers using the technology for daily needs.
A stablecoin is a digital currency designed to maintain a consistent value by pegging it to a fixed asset like the U.S. dollar. Stablecoins, unlike Bitcoin, offer predictability for daily transactions by backing their value with cash or other stable assets.
With it, banks and non-bank institutions could issue stablecoins if they hold 1:1 reserves in high-quality liquid assets. House lawmakers, meanwhile, have proposed more restrictive reserve requirements in their competing STABLE Act.
If signed into law, the bill would address a regulatory gap that has persisted for years as stablecoins grew to over $240 billion in market capitalization, data from CoinGecko shows.
@ Newshounds News™
Source: Decrypt
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BITWISE CIO WARNS OF CHALLENGING SUMMER FOR CRYPTO IF CONGRESS ‘FUMBLES THE BALL’ ON LEGISLATION
▪️Bitwise CIO Matt Hougan has warned of a mounting risk for crypto in Washington D.C., leading to a challenging summer for the industry if legislative efforts are derailed.
▪️However, Hougan remains optimistic that most crypto assets can trade to new all-time highs this year if Congress can get stablecoin and market structure bills passed.
Bitwise Chief Investment Officer Matt Hougan said he is increasingly concerned that the U.S. Congress will “fumble the ball at the one-yard line” on crypto regulation, warning that the industry is in for a difficult summer if legislative efforts fizzle out.
Hougan remains optimistic about the outlook for crypto this year, with a base case for most digital assets to reach all-time highs and bitcoin to rise above $200,000. However, despite the seemingly positive backdrop under the Trump administration, “crypto can still be derailed by politicians”, he said.
Crypto rallied after the U.S. presidential election in November, partly on the assumption that Washington would take a more positive stance toward crypto.
The first 100 days of Trump’s tenure have seen the creation of a Bitcoin Strategic Reserve, digital assets named a “national priority,” the SEC reversing crypto-related lawsuits and accounting rules and the end of Operation Choke Point 2.0. However, these initiatives have all stemmed from the White House, meaning they could easily be reversed by future administrations, Hougan warned in a note to clients late Monday.
“To move crypto forward, we need Congress to pass legislation enshrining crypto’s progress in law,“ he said. “Congress passing at least one crypto bill would show that Democrats and Republicans can align on crypto and make it more difficult for future regimes to undo progress.”
The stablecoin bill debacle
Hougan had expected stablecoin legislation to rapidly pass this year, broadening crypto’s access to the traditional market, creating a new profit center for Wall Street and providing a huge buyer of U.S. debt as a tool to extend dollar dominance globally. A “win, win, win,” he said.
In mid-March, this seemed to be on track as the Senate Banking Committee voted 18 to 6 to pass a stablecoin bill, called the GENIUS Act, out of committee, Hougan noted. In that vote, five Democrats on the committee broke ranks to support the bill, with Senate Minority Leader Chuck Schumer also backing it.
The bill would require stablecoins to have 100% reserve backing with U.S. dollars and short-term treasuries (or other similarly liquid assets), monthly public disclosure of reserves and annual audits for issuers with more than $50 billion in market capitalization. The bill also lays out strict marketing standards, guidelines on insolvency proceedings and other provisions.
However, over the weekend, nine Democrats, including four of the five who backed the bill in committee and Schumer himself, pulled their support, just days before the bill was set to hit the floor of the Senate. The Democrats argued that the bill needs stronger provisions on national security and anti-money laundering policy.
The bill requires 60 votes to pass in the Senate; with Republicans controlling only 53 seats, a bipartisan deal is a must. “We have a choice here,” Republican Senator Bill Hagerty, one of the authors of the bill, wrote in response.
“Move forward and make any remaining changes needed in a bipartisan way, or show that digital asset and crypto legislation remains a solely Republican issue.”
“The change in tune reflects the shifting political environment in Washington,” Hougan said.
“The amended version of the bill is actually stronger on AML/KYC and other items than the version that passed out of the Banking Committee, suggesting the Democratic about-face has more to do with President Trump’s slumping approval rating and rising chatter over his crypto-related conflicts of interest than any substantive concern.”
Hougan also argued that lobbying efforts from the crypto industry to combine stablecoin legislation with broader market structure legislation are not helping. “This is the perfect becoming the enemy of the good,” he said. “Market structure legislation is extremely important to crypto’s long-term future, but lumping things together will make the passage of any bill more difficult.”
What’s next?
Beyond the GENIUS Act uncertainty, House Democrats are reportedly planning to walk out of a joint congressional hearing on crypto market structure legislation scheduled for Tuesday as pressure mounts over concerns about President Donald Trump’s forays into digital assets.
Another stablecoin bill, known as the STABLE Act, has been advancing in the House. World Liberty Financial, a DeFi project backed by Trump, also recently launched its own stablecoin.
While the future of the GENIUS Act has been thrown into question in its current form, and political jockeying threatens to undermine progress on other crypto-related legislation, Hougan still expects the stablecoin bill to ultimately pass.
“Stablecoins are too obviously beneficial — to America, the dollar, merchants, entrepreneurs, and others — for petty political jockeying to derail progress,” he said.
“The next few days and weeks will be fraught. If legislation fizzles, this could be a challenging summer for crypto. But if Washington can get its act together, I think the bull market will be unstoppable.”
@ Newshounds News™
Source: The Block
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