The last draft of the National Innovation Law for National Innovation of the United States (Genius), introduced before an audience on Tuesday, proposes a significant change in the stable supervision approach.
The draft wishes to divide the regulation of Stablecoin between the state and federal authorities, while introducing new application and transparency requirements for the issuers.
Genius law is sponsored by senators Bill Hagerty (R-TN), Tim Scott (R-SC), president of the Senate Banking Committee, Kirsten Gillibrand (D-NY), Cynthia Lummis (R-WY) and Angela Alsebrooks (D-MD). It was first introduced by Hagerty in February.
One of the most notable changes is the increase in the threshold for the state regulatory authority on the stables.
The states would now be allowed to supervise Stablecoin issuers in collaboration with federal authorities with a market capitalization of up to $ 10 billion, giving them greater power in regulating a larger part of the Stablecoin market.
The newest draft of the bill also includes an exemption process, which allows larger issuers to remain only under state supervision if they comply with specific criteria.
To obtain an exemption and remain under state supervision, Stablecoin emitters must demonstrate a strong capital, a good history, and be supervised so Bills call an experienced state regulator.
The updated bill also presents new transparency and dissemination requirements for the issuers. It would be required that the emitters publish monthly liquidity reports that detail the composition of their reserves, including the total number of stable pending.
According to the latest version of the bill, the reserves must be the US currency, demand deposits, treasure bonds or other “approved assets.”
Stablecoin emitters should also create mechanisms that allow them to fulfill the orders to freeze transactions, and grant the Treasury Secretary the authority to block and prohibit transactions that involve stable issued by foreign persons or entities.
Although the previous versions of the bill had provisions related to the improved requirements of its client (KYC) and anti-launch of money (AML), the updated version of the bill explicitly designates the stablecoin issues as financial institutions for AML purposes that require them to establish compliance programs and carry out due diligence in high value transactions.
The bill now expects amendments of the Senate Banking Committee before a complete Senate referral for the debate and a final vote.
