The Senate is poised to pass legislation that would provide a clear regulatory framework for stablecoins as advocates such as Sen. Bill Hagerty (R-TN) say the legislation would help American consumers and protect American “financial dominance.”
The Senate last week voted to advance the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, a bill that aims to provide a clear regulatory framework for the approximately $238 billion stablecoin market.
A stablecoin is a form of cryptocurrency that is pegged to the value of another asset such as the United States dollar.
For Hagerty, the chief sponsor of the GENIUS Act, he believes that the bill helps enable innovation in America’s payment system as much of that system remains antiquated.
“For too long, the lack of any such framework has forced digital asset innovation beyond our borders and into foreign countries, jeopardizing our nation’s financial leadership and putting American consumers at risk, ” Hagerty said in a Senate floor speech last week. “Meanwhile, our slow and outdated payment rails — developed in the 1970s and 1980s — have failed to keep pace with many overseas jurisdictions. To modernize our payment system and restore our nation’s competitive edge, we must act now.”
The Volunteer State conservative explained that passing the GENIUS Act into law would benefit Americans through faster and cheaper transactions, help strengthen the U.S. Dollar’s status in the world, and more:
The benefits of stablecoin innovation are immense. By reducing friction in the payment process, they can improve the speed and efficiency of cross-border payments. Faster and cheaper transactions can unlock much-needed working capital for American businesses and provide individuals with more effective tools for making international payments.
Moving aspects of our payment system to the blockchain has been shown to increase efficiencies in capital markets. Innovators are constantly uncovering transformative use cases, and the rapid pace of innovation will only increase with regulatory clarity.
Stablecoins also advance a vital national interest by driving demand for U.S. Treasuries. A recent report forecasts that with a well-crafted U.S. regulatory framework, stablecoin issuers could become one of the top holders of U.S. Treasuries by the end of this decade — if not sooner. This would strengthen our fiscal position and cement the dollar’s status as the world’s reserve currency.
Hagerty noted, “inaction would surrender our leadership to the Chinese Communist Party, which is aggressively advancing its own digital currency.”
“We have an opportunity to cement America’s financial dominance for decades to come and demonstrate that this body can come together and pass legislation that benefits our country and its citizens. I urge all my colleagues to join me in advancing the GENIUS Act,” he continued.
Sean Moran is a policy reporter for Breitbart News. Follow him on X @SeanMoran3.
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