GENIUS Act Advances in Senate; House Legislators Reintroduce Blockchain Certainty Act
On May 21, U.S. lawmakers moved forward with two legislative initiatives focused on blockchain technology, advancing the GENIUS Act for discussion while reintroducing the Blockchain Regulatory Certainty Act in the House.
A vote of 69–31 resulted in the approval of a motion to move forward with the Government and Enterprise Need for Innovation in the United States Act, known as the GENIUS Act, paving the way for formal debate and potential amendments.
This motion follows a successful cloture vote of 66–32 on May 19, which concluded initial discussions and indicated strong bipartisan backing for the bill.
Senate Discussions on the GENIUS Act
The GENIUS Act establishes guidelines for stablecoin issuance, mandating that issuers maintain high-quality liquid reserves, typically comprising U.S. Treasury securities or insured bank deposits, fully backing liabilities at a 1:1 ratio.
It forbids the provision of yield-accruing products and mandates adherence to know-your-customer (KYC) protocols, monitoring for suspicious activities, and compliance with anti-money laundering (AML) regulations.
Issuers are also required to operate under the scrutiny of federal agencies or state regulators that have received federal certification, depending on their scale of issuance.
The approval for debate allows for an amendment phase that facilitates comprehensive discussions, as well as the ability to place limits on the debate. This open-ended discussion period enables senators to introduce and examine amendments prior to any final voting.
Blockchain Regulatory Certainty Act
Alongside ongoing Senate debates, representatives in the House have proposed an additional measure aimed at enhancing regulatory clarity for developers.
Representatives Tom Emmer and Ritchie Torres reintroduced the Blockchain Regulatory Certainty Act to establish protections for software developers and blockchain service providers that do not take custody of customer assets.
This legislation seeks to create a federal safe harbor that would exempt developers and node operators from categorization as money transmitters, financial institutions, or other regulated entities merely for creating or maintaining blockchain software.
The proposed law identifies a “blockchain developer” as any entity involved in the creation or maintenance of software for decentralized networks, and defines “control” as the legal ability to directly access and handle digital assets without a third party’s intervention.
Additionally, the act stipulates that developers or service providers will not be subject to state or federal licensing requirements unless they possess control over users’ digital assets. It also clarifies that this legislation does not override intellectual property laws or prevent states from implementing compatible regulatory measures.
Although the House has not yet set a markup or floor vote for the Blockchain Regulatory Certainty Act, its introduction indicates a renewed initiative to delineate between custodial and non-custodial participants in the ecosystem of digital assets.
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