The ink on the GENIUS Act doesn’t seem as wet as it used to be.
The banking industry wants the Senate to re-open the GENIUS Act, imposing further limits on the yields paid out to consumers on their stablecoins.
The crypto industry, meanwhile, warned senators this week to stay clear of the issue. And Washington seems to have gotten the message. Right now, key senators appear firmly aligned with the crypto position.
“I would prefer to do market structure as market structure,” Sen. Kirsten Gillibrand (D-N.Y.) said on Monday, referring to the next big crypto bill legislators are hammering out. “Then, over time, we can improve upon stablecoin regulation, but we have to write the regs first.”
The GENIUS Act was signed into law in July to regulate stablecoins, a type of crypto asset designed to maintain a steady value — usually for conducting other crypto transactions.
Banks lobbied hard, and successfully, for a prohibition on the ability of stablecoins to pay out interest or yields to the folks who hold them. But in the weeks after GENIUS passed, bank advocates adjusted their focus to crypto exchanges, like Coinbase, which would like to offer “rewards” to stablecoin holders.
We’ve been talking about further amendments to GENIUS in part because the CLARITY Act — which the House passed in July to overhaul crypto’s market structure regulation — would introduce some tweaks to GENIUS.
Sen. Cynthia Lummis (R-Wyo.) told us she was still open to those changes, but that wouldn’t include the interest that prohibition banks are angling for.
“I’d like to confine our changes to those recommended by the House and not relitigate other issues,” Lummis said.
Sen. Bernie Moreno (R-Ohio) said banks should be happy with where things stand.
“We’re not going to revisit GENIUS at all. The banks have gotten a lot of love with this administration,” Moreno said.
Not all senators have ruled out stablecoin interest tweaks.
“We’re trying to make sure there is a very good, clear separation between our institutional, traditional banks that are offering yields and interest, and other types of institutions that may be offering types of rewards,” Sen. Ruben Gallego (D-Ariz.) said.
Meanwhile in shutdown prep: Sen. Mike Rounds (R-S.D.) told reporters Monday night that lawmakers were working toward a short-term extension of the National Flood Insurance Program’s authorization.
Rounds said some senators were “talking about” asking for unanimous consent to extend NFIP authorization. Losing NFIP authorization would prevent the federal government from selling and renewing flood insurance policies.
