US House of Representatives passed three crypto regulation bills at once

What’s new? On July 17, the US House of Representatives passed three cryptocurrency bills addressing issues such as the issuance of stablecoins, industry oversight, and central bank digital currency (CBDC) restrictions. As a result, the first of them, known by the acronym GENIUS and defining the regulation of stablecoin issuers, has already been sent to the President for his signature, as it was drafted by the Senate and previously received his approval.

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What else is known? GENIUS will go into effect 18 months after Trump signs it, or 120 days after “the primary federal payment stablecoin regulators,” including the Treasury Department and the Fed, publish final regulations implementing it.

GENIUS states that stablecoin issuers authorized to operate in the US must back their tokens at a 1:1 ratio with reserves in dollars or other cash equivalents such as Treasury bills.

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Issuers will be required to regularly publish the composition of these reserves and make them available for review by third-party auditors, and send the results of the reports to federal or state regulators.

Three years after the bill is signed into law, it will be prohibited to offer in the United States any stablecoins issued by an unapproved issuer, including foreign companies.

At the same time, the document provides a number of exceptions for foreign issuers. Thus, in case the Treasury Department determines that the country where such an issuer is headquartered has a comparable regulatory regime to the US, it will be allowed to continue operating.

Such foreign issuers will be able to serve the US market if they register with the Office of the Comptroller of the Currency (OCC) and have sufficient reserves in a US bank to guarantee payments to US customers.

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The bill authorizes the issuance of stablecoins to different types of regulated entities, such as banks, credit unions, and non-banks, and creates a dual legal framework for their federal and state supervision.

These organizations, depending on their type, may be regulated by the National Credit Union Administration, the Federal Deposit Insurance Corporation (FDIC), the OCC, the Treasury Department, or the Federal Reserve.

If the capitalization of a stablecoin does not exceed $10 billion, the company issuing it can choose state regulation instead of federal regulation, and the state is not required to establish a special regulatory agency.

GENIUS passed by a vote of 307 to 122, with more than 100 Democrats joining a majority of Republicans in advancing it.

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In a separate action, the House of Representatives approved the CLARITY bill by a vote of 294 to 134 and sent it to the Senate, the upper chamber of Congress, for consideration.

It defines jurisdictional boundaries for crypto exchanges that offer trading in tokens that do not fall under the definition of a security.

CLARITY directs the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to form a common guideline that would allow crypto exchanges to list eligible tokens and derivatives.

Also passed by a vote of 219 to 210 was the Anti-CBDC bill, which prohibits the Fed from developing and issuing a digital dollar because of the threat to citizens’ privacy. It was supported by two members of the Democratic Party, among others.