Washington, D.C. is a city of constant motion, especially when it comes to crafting new laws. Sometimes, a bill passes, becomes law, and then almost immediately, lawmakers start talking about how to make it even better. That is precisely the story unfolding with the Guiding and Establishing National Innovation for U.S. Stablecoins, or GENIUS, Act.
- Lawmakers are already discussing amendments to the recently passed GENIUS Act for stablecoins, indicating a dynamic legislative process.
- Proposed changes, particularly from the House’s Clarity Act, aim to enhance accountability, investor protection, and clarify the rights of individual crypto holders.
- Both the House and Senate are working on market structure bills that are expected to modify the GENIUS Act, with an ambitious goal of finalizing legislation by year-end.
This stablecoin law, a significant win for the crypto world, is barely off the presses. Federal regulators are just beginning to implement its rules. Yet, key figures like U.S. Representative French Hill and Senator Cynthia Lummis are already eyeing adjustments.
Representative Hill, often called the “Father of Crypto Bills” on the House side, has been watching from the sidelines. His House colleagues passed their Digital Asset Market Clarity Act this year. That bill, designed to bring structure to the crypto market, also included some important proposed changes to GENIUS.
Think of it like this: you buy a brand-new car, and before you even drive it off the lot, the manufacturer announces a few upgrades for next year’s model. That is a bit how the crypto legislative process feels right now. Lawmakers are refining their work even as it takes effect.
Senator Lummis, a strong voice for crypto in the Senate, agrees with Hill. She anticipates the Senate’s own market structure bill will also modify the young stablecoin law. She wants to be “very respectful of the House’s amendments,” she noted recently.
So, what exactly are these tweaks that Representative Hill and others believe will make GENIUS stronger? They are tucked away in Section 512 of the House’s Clarity Act. These are not minor adjustments; they aim for greater accountability and investor protection.
One key change focuses on leadership responsibility. It calls for a more detailed section on holding CEOs and chief financial officers legally liable. They would need to routinely disclose accurate financial data for stablecoin issuers.
To add another layer of security, the proposed changes also include an annual check from an independent accounting firm. This firm would act as a backstop, ensuring the issuers’ internal controls are sound. It is about making sure the numbers add up, year after year.
Another significant tweak addresses who can get into the stablecoin business. The House bill suggests a more detailed prohibition on non-financial companies issuing stablecoins. This aims to keep the stablecoin market focused and regulated appropriately.
Perhaps most interesting for the everyday crypto enthusiast, the House bill seeks to assure investor rights. It wants to guarantee that a U.S. investor can “maintain a hardware wallet or software wallet for the purpose of facilitating the individual’s own lawful custody of digital assets.”
This means your right to hold your own crypto, off an exchange, would be explicitly protected. It is a nod to the core principle of self-custody that many in the crypto community value deeply. The bill also assures the ability to engage in peer-to-peer transactions, a foundational element of decentralized finance (DeFi).
Representative Hill shared his perspective at a CoinDesk event in Washington. “We just thought these were ways to make GENIUS stronger and better, based on work we’ve done in the House,” he explained. It is a practical approach, building on lessons learned.
The Senate’s Perspective and the Road Ahead
Senator Lummis, speaking on the sidelines of that same CoinDesk event, confirmed the Senate’s intentions. She expects their market structure bill to include language that changes GENIUS. “So I do think that there will be some language that changes GENIUS,” she stated clearly.
Later, at a Cato Institute event, Hill reiterated his preference. “I prefer the House version,” he said. But he acknowledged the collaborative spirit. “We were able to work between the two houses to outline a few changes that we would make to GENIUS, and we put them in the Clarity Act.”
The Senate Banking Committee’s Republicans recently released a draft version of their bill. Some senators, including Lummis, are quite ambitious. They talk about finishing their bill by the end of this very month. That is a tight deadline for such complex legislation.
The House’s Clarity Act passed with a strong bipartisan vote, 308-122. That is a clear signal of broad support. However, not everyone in the Senate is entirely on board with the current pace. Senator John Kennedy of Louisiana, a Republican on the Banking Committee, has expressed some reservations about the readiness of the Senate’s work.
Representative Hill noted that the Senate committee has not been working on these topics for as long as the House. Yet, he remains optimistic. “I think they can get this done,” he said. He pointed to work teams from both parties in the Senate. “And they are collaborating to get to yes,” he added, highlighting the spirit of cooperation.
The timeline for turning this market structure effort into law is ambitious. Crypto advisers in the administration, including Tyler Williams at the Treasury Department, are aiming for the end of this year. Senator Lummis has offered the same target. It is a race against the calendar, but one with significant implications for how crypto operates in the U.S.
This ongoing legislative dance shows just how quickly the crypto landscape evolves. Even a new law can spark immediate conversations about further refinements. It is a testament to the dynamic nature of digital assets and the persistent effort to get regulation just right.
The coming months will reveal whether these proposed tweaks to GENIUS make it into the final market structure bill. It will be interesting to see how the Senate balances the House’s detailed suggestions with its own priorities, all while aiming for that end-of-year finish line.
