Once expected to pass smoothly through Congress, the GENIUS Act was severely disrupted after 10 US senators withdrew their support. This unexpected move has placed the future of stablecoin regulation in jeopardy and created uncertainty for issuers preparing for upcoming compliance requirements.
According to cryptocurrency journalist Eleanor Terrett, the group of senators led by Congressman Ruben Gallego released a joint statement outlining their concerns. The lawmakers denounced multiple deficiencies in the current GENIUS Act because it operates under its former name, of Guiding and Establishing National Innovation for US Stablecoins Act.
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Congress members insist that future anti-money laundering measures and enhanced national security standards must enhance their protective capabilities. The senators expressed concern because the bill lacks effective protocols for foreign stablecoin platforms and does not contain substantial penalties for regulators who do not comply with regulations.
The representatives stated in their public statement that they needed the bill to include specific revisions before they would enable a cloture vote. The decision is a severe setback for the bill’s progress because it will probably slow down the regulatory authorization process.
Stablecoin Industry Faces Uncertainty as Bill Faces Major Setback
The senators’ resistance has caused instability across the stablecoin sector. With the GENIUS Act hanging in the balance, issuers must reconsider or pause their plans.
Ripple suspended its RLUSD minting operations when its market capitalization hit $300 million due to unanswered regulatory questions. Due to current regulatory issues, the planned release of Tether’s new US stablecoin for American users remains uncertain. The planned central exchange listing for WLFI’s USD1 stablecoin also faces potential delay.
Initially, Congressman Bo Hines indicated that the regulatory framework would be released before June. However, legislation progress faces delays because a large number of legislators oppose the current bill text, which must undergo amendments before being forwarded.
Conclusion
Ten senators’ withdrawal of support has created a serious obstacle for the GENIUS Act. Stablecoin issuers now face mounting pressure as they wait for clarity on new regulatory standards.
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