Latest news with #GENIUS
Forbes
a day ago
- Business
- Forbes
The GENIUS Act Is A Good Start, But Congress Could Make It Smarter
WASHINGTON, DC - MARCH 10: U.S. Vice President JD Vance addresses the National League of Cities: ... More Congressional City Conference at the Marriott Marquis on March 10, 2025 in Washington, DC. According to the league, more than 2,000 state and local government officials from across the United States attend the conference to share legislative priorities and policy ideas with members of Congress and the administration and participate in leadership training. (Photo by) Fans of cryptocurrency have long seen stablecoins, a type of crypto that promises stable value, as a gateway to expanding crypto's use and familiarity. The GENIUS Act, the stablecoin legislation currently moving through the Senate, might be the best chance to deliver a favorable legal framework soon, and the chances are better because the Trump administration has made crypto a priority. Last week, Vice President JD Vance even took a clear principled stance, arguing that the United States should not have 'a dictatorial government that tells certain industries they're not allowed to do what they need to do,' and that the government should 'let people make these decisions on their own.' Ignoring the question of why these same ideas shouldn't apply to the rest of Americans' economic decisions, Vance is right. Financial regulation does not have to be based on restricting what people can do with their money, especially not because government officials think certain products or behaviors are 'too risky.' It would be a very different approach from what the United States has done for the past 100 years, but financial regulation should be based on rules that mainly protect people from fraudulent behavior. In the case of stablecoins, regulation that protects from fraudulent behavior would be straightforward, focusing on the reserves they use to maintain a stable value. Most stablecoins try to achieve a stable value by using cash and short-term securities (often U.S. Treasuries) as collateral. In these cases, anyone holding a stablecoin is supposed to be able to convert back to dollars seamlessly, without losing value. So, verifying that a stablecoin issuer really has the 'reserves' it advertises is a key regulatory function. It really should be that simple, but it seems the GENIUS Act negotiations are headed in the wrong direction. As my colleague Jennifer Schulp has pointed out, at least two problems run counter to the goal of fostering innovation and competition in the payments sector. (By the way, the GENIUS acronym stands for Guiding and Establishing National Innovation for U.S. Stablecoins.) First, the Senate is effectively prohibiting large nonfinancial firms—Walmart, Google, Apple, etc.—from issuing stablecoins. Some elected officials want to explicitly prohibit everyone other than federally insured banks from issuing stablecoins, so I suppose this provision could be worse. Still, the hostility toward large nonfinancial companies is a harmful restriction on competition, one that fails to create a neutral regulatory environment or create a level playing field for issuers. Another problem is that the Senate wants to make the Fed, the Treasury, and the Federal Deposit Insurance Corporation part of a 'Stablecoin Certification Review Committee.' This committee would, among other things, have to sign off on state regulatory regimes for 'smaller' stablecoin issuers to operate under a state-based regulatory framework. This feature is dangerously close to violating Vice President Vance's recently espoused principles and surely violates the spirit of a free enterprise system. It also runs counter to the goal of fostering innovation and competition in the payments sector. And there's one more looming problem with the Senate's approach—it doubles down on 'financial stability' regulation. For instance, the GENIUS Act requires the Comptroller of the Currency to issue regulations to 'ensure financial stability.' Unfortunately, this approach fits perfectly with the grossly ineffective regulatory framework we already have. Federal regulators have been trying to ensure financial stability for decades, long before the 2008 financial crisis. It does not work. At best, it gives federal officials the discretion to dictate behavior based on virtually any conceivable potential risk. It gives them the ability to tell people what they can do with their money to reach a regulatory goal that can only be achieved by prohibiting people from taking risks. The history of financial regulation has clarified the problems with this approach, but somehow that history still gets badly distorted. The federal financial regulatory framework has repeatedly failed to maintain financial stability or protect taxpayers, so it makes little sense to keep doubling down on the failed approach. Still, critics of crypto want more government involvement to maintain stability, and this is a source of problems in both the overall financial regulatory framework and the approach shaping up in the GENIUS Act. It's also a problem that comes from the fear of allowing private sector companies to operate too freely with people's money. But the monetary system, though heavily regulated, already consists mostly of privately created money. And the payments sector, though heavily regulated, already relies on many private sector companies. In many respects, crypto is a response to the inefficiencies in the payments sector caused by too much government involvement, so it would be counterproductive to squash this new technology before it can improve the payments system. Many critics want a fully public system, but a private system, with strong property rights and government fraud protection, would be superior to a fully public system. Payments systems are not an exception to the superiority of free enterprise. Providing a simple framework for fully backed stablecoins, one that prohibits fraud and makes it easy to verify reserves, should be a no-brainer. It's a great way to let people determine if the technology is worthwhile, just like Vice President Vance suggests. If the fully backed tokens work as some people think they will, it will only strengthen the payments system and the status of the U.S. dollar. Members of Congress should recognize that it makes little sense to double down on the overly paternalistic and prescriptive federal regime that's already in place. The current approach trusts regulators' judgment instead of the judgment of people using the markets every day. Expanding that approach will ensure that regular Americans continue to lose their ability to do what they want with their money. It will not prevent financial crises, but it will deliver even more rules and directives that enrich the well-connected and harm regular Americans. Surely Congress can do better. Then, they can work with the administration to apply Vice President Vance's principles to the rest of the economy.
Yahoo
2 days ago
- Business
- Yahoo
Will crypto replace banking? The Trump administration can't decide
Last year, Donald Trump took the stage of the Las Vegas Bitcoin Conference to worship at the altar of cryptocurrency. He said he would fire Gary Gensler, the former chair of the Securities and Exchange Commission who led a yearslong crackdown on crypto fraud. The audience roared. He ended on a rousing note: 'We will make America and Bitcoin bigger, better, stronger, richer, freer, and greater than ever before.' This company asked most corporate employees to relocate to Chicago. The majority declined Trump administration orders Pennsylvania power plant to run through the summer Redfin: These 31 major housing markets have shifted to buyer's markets Some crypto activists were perturbed. Sure, Trump rallied behind Bitcoin as a source of industrial growth, but why wouldn't he commit to outright replacing banking with digital currencies? Trump failed to comment on the traditional banks, which crypto advocates thought were discriminating against them by shutting down their accounts, or fiat currency, which some crypto boosters hope to replace entirely. One year later, President Trump skipped out on the Bitcoin Conference, but he sent his envoys. The administration's crypto message has become even more muddled. While Vice President JD Vance emphasized that stablecoins regulated by the administration's new crypto proposal (the GENIUS Act) don't 'threaten the integrity of the U.S. dollar,' Eric Trump said that he'd like to see some major banks 'go extinct.' It seems no one will decide whether crypto is a strength to—or a replacement for—the U.S. financial system. Vice President Vance headlined the conference, where he struck a similar tone to Trump's 2024 speech. He emphasized that Bitcoin is part of the 'mainstream economy,' calling it a digital asset—but not a currency. Vance also promoted the GENIUS Act, which would set regulations for currency or commodity-backed stablecoins (crypto currencies pegged to fiat currency or other reference asset) so they could flow more freely. The bill has already passed through the Senate, and is waiting for a House vote. Vance promised that these coins wouldn't threaten the dollar. 'Dollar-pegged stablecoins, particularly once GENIUS is enacted, are only going to help the American economy and [are] only going to help the American dollar,' he claimed. Central to Trump's crypto strategy was the establishment of a Bitcoin reserve, allowing the government to collect and hold cryptocurrency from criminal or civil asset seizures. But whether this stockpile operates alongside, or in competition with dollar spending remains blurry. Bo Hines, the executive director of Trump's digital assets advisory, spoke of Bitcoin as something the government could grow endlessly. 'We want as much of it as we can possibly get,' he said at the conference. 'We're not going to sell any Bitcoin that we have in the U.S. government, period.' On the other hand, Trump's crypto czar David Sacks was more measured in his words. He said that he 'can't promise anything,' but that he hoped the government would be able to buy more Bitcoin. 'If either the Commerce Department or the Treasury Department can figure out how to fund it without adding to the debt, then they are allowed to create those programs,' he claimed. 'Maybe find the money from some other program that's not using it.' While they struck different tones, Vance, Hines, and Sacks all spoke of Bitcoin as an asset class. Whether it could constitute a new financial system—the currency's original mission—was outside the question. But Eric Trump—while not an administration official, is certainly influential on Trump policy—claimed that crypto could replace banking entirely: 'It makes everything cheaper, it makes it faster, it makes it safer, it makes it more transparent.' He said that he'd 'love to see some of the big banks go extinct.' Trump has backed crypto expansion forcefully, but his rationale remains slippery. At the recent Blockworks Digital Asset Summit, Trump told the audience that they will 'unleash an explosion of international growth,' but didn't explain how, other than a brief reference to stablecoins supporting the dollar. 'It is exciting to watch as you invent the future of finance,' Trump said, while not venturing to explain whether that future included traditional banks. Why is Trump so into crypto? Much of it is likely for personal gain. Trump has raked in millions on his memecoins and NFTs, sending cash directly to his wallet. Crypto advocates also helped Trump reach the White House in the first place. Their lobby has political heft: According to a New Yorker report, they tanked Katie Porter's California Senate bid after she expressed mere glimmers of anti-crypto rhetoric. But there's a political tension underlying Trump's crypto push. If he says that crypto will replace banking—or even fiat currency—traditional financiers could riot. But, if he claims that Bitcoin is merely an asset class and not the future of finance, he could anger the crypto community. For now, Trump and his administration will try to sit on both sides of the fence. This post originally appeared at to get the Fast Company newsletter: Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
Stablecoin Bills in House and Senate Still Need to Mesh on Several Points: French Hill
The U.S. Senate may be fast approaching a final vote on regulating stablecoins, which would be a high-water mark for crypto legislation in Congress, but Representative French Hill said the Senate's bill has some key differences with a similar effort in the House of Representatives, and those would need to be ironed out before it can become law. "The bills are substantially similar," said Hill, the chairman of the House Financial Services Committee that has been at the forefront of the congressional negotiation over stablecoins for years, at an Atlantic Council event on Tuesday. "There are some differences that are not insurmountable but do need to be rectified and clarified." Hill said one of the standout differences includes the House's tougher requirements on "reciprocity" of international regulation over foreign issuers of stablecoins that might trade in the U.S. — a category most often associated with the leading global token, Tether's USDT. "You can either be registered in the U.S. and be a U.S. company under the stablecoin law and you are fully compliant, or you are in a jurisdiction recognized by the U.S. to have a substantially similar regime and enforcement," Hill said, noting the House version — which cleared his committee with bipartisan support but hasn't faced a floor vote — seems to be more strict than the Senate's. However, he noted "we don't know the final text of their bill," which is still being negotiated and amended. Hill also said the House bill has a "cleaner" pathway for determining what entities at the state or federal level regulate the issuers, depending on their business models. And the two chambers pursued different approaches to letting non-financial companies issue stablecoins, which touches on longstanding concerns over the traditional separation of banking and commerce and has drawn criticism from Democrats who say they're worried about tech giants taking over the financial system. The House version says such companies are free to issue stablecoins under regulation by the Office of the Comptroller of the Currency, while the latest Senate version said that certain public companies would be banned from putting out the tokens. Hill said the Senate has some work to do on clarifying its approach. He said he wonders about the common narrative of stablecoin legislation being easier to pass in Congress than the more complex and far-reaching oversight of the entire crypto markets, citing the House's success in passing the latter in the last session while getting hung up on its stablecoin negotiations. But Hill also acknowledged the years of paralysis in the Senate over crypto matters, saying that the chamber's recent actions on its stablecoin legislation, the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, are "really important" to moving the effort forward. He said he's optimistic the House will do its part, too. "The House is really in a position to deliver on President Trump's promises," he said, referring to President Donald Trump's wish to have the stablecoin and market-structure bills on his desk for signatures by the August congressional recess. In U.S. lawmaking, both the Senate and the House have to ultimately agree to identical versions of a bill before it can be signed into law by the president. If the Senate approves its stablecoin bill as soon as this week, the House has the choice of voting on that same language or pursuing its own. If it passes a different version, the two would have to be hashed into a compromise version that would need another round of approvals in each chamber. In recent weeks, the stablecoin legislation has cleared the Senate Banking committee and early procedural votes on the floor with massive bipartisan support. But it did get delayed at one point by objections from Democrats that it didn't include enough safeguards for illicit activity, and that the bill should ban public officials such as the president from engaging in the business. Hill acknowledged, as he had at Consensus 2025 in Toronto, that Trump's personal involvement with crypto businesses — including stablecoins — has made the legislative debate more political than he'd like."It has made it more complicated, because it's a distraction from that core work," Hill said.
Yahoo
3 days ago
- Politics
- Yahoo
We Can't Regulate Our Way to Crypto Leadership. We Still Need Science
The following open letter was written by Dan Boneh (Stanford), Joseph Bonneau (NYU), Giulia Fanti (Carnegie Mellon), Ben Fisch (Yale), Ari Juels (Cornell), Farinaz Koushanfar (U.C. San Diego), Andrew Miller (University of Illinois at Urbana Champaign), Ciamac Moallemi (Columbia), David Tse (Stanford), Pramod Viswanath (Princeton).Here's a multiple choice question. Algorand, Arbitrum, Avalanche, Axelar, Babylon, Cardano, Cosmos, Eigenlayer, Espresso, Flashbots, Oasis, Starkware, Sui. Byzantine Fault Tolerant (BFT) protocols, digital signatures, formal verification, maximal extractable value (MEV), public-key cryptography, proof of work, rollups, trusted execution environments (TEEs) used in blockchain systems, verifiable random functions (VRFs), zero-knowledge proof systems. Which of the following is true of the companies, projects, and concepts listed above? A) They were invented / created by researchers employed at or with deep roots in academic institutions. B) They have fueled and transformed the crypto / blockchain industry. C) They demonstrate how essential academic innovation is to the crypto / blockchain industry. D) All of the above. The answer is D. The lion's share of these innovations happened at universities, largely in the United States. Both the White House and Congress are working to support and accelerate innovation and bolster U.S. dominance in the crypto economy and the blockchain technologies that power it. The White House has established the Presidential Working Group on Digital Asset Markets, while two major pieces of legislation, the GENIUS and STABLE bills, are pending in Congress. There is a crying need for regulatory and legislative reforms that prioritize and support innovation in crypto while enforcing robust protections for consumers. Efforts to accomplish these things sensibly are to be applauded. At the same time, though, we are on the brink of seeing massive cuts to academic research funding in the United States. The White House budget proposal for 2025 includes a cut of 55% for the National Science Foundation (NSF). In the meantime, China increased its budget by 10% last year. NSF is the source of most federal funding for research in computer science at U.S. universities. It's the main source of funding that has driven crypto innovations like those in the list above. Companies provide little funding for academic research because it's not product-specific. So defunding NSF means defunding scientists in the U.S.—including those leading crypto innovation. We are academic researchers in the field of crypto, representing five U.S. universities. Alongside our teaching, we conduct research and train PhD students. While market cap is a short-term indicator of the crypto industry's health, the number of PhD students studying blockchain is a long-term one: it reflects the depth of future scientific leadership. That pipeline is already thinning. Several of us could not take on new PhD students this year due to the uncertain U.S. funding climate. And we are not alone. Several of the companies in the list above were co-founded by former members of our academic groups or by us. If future members of our groups vanish alongside scientific funding, so will successful future founders of crypto companies in the U.S. And PhD students don't just start companies. They are also the engine that powers academic and ultimately industry research, doing the brain- and labor-intensive work behind the technical innovations that lead to faster, more secure blockchains. PhD students in our groups played a key role in creating or advancing in many of the concepts in the second list above. If they vanish, so will the breakthroughs they would have brought to the industry. When we're funded to do research and stay on the cusp of innovation in crypto, we're also better teachers—able to equip students with the latest advances. That means stronger technical leaders educated in the U.S. Better regulation and legislation could be a boon to crypto. But U.S. leadership in crypto won't be secured by policy alone. At the forefront of crypto innovation is science—and U.S. universities have long been its powerhouse. If you're a farmer trying to ensure a strong harvest, it's wise to upgrade your equipment and expand your fields. But if you stop planting seedcorn, no amount of machinery will save the crop. If you care about U.S. leadership in crypto, contact your congressional representatives and senators. Urge them to support the research funding that has made American universities the seedbed of global scientific and technical leadership—blockchain technology Boneh is a Professor of Computer Science and Electrical Engineering at Stanford University, and advises a16z crypto and several projects in the blockchain space. Joseph Bonneau is an Associate Professor of Computer Science at New York University. He has served as an advisor for Zcash, Algorand, Chia, O(1) labs and Espresso Systems and as a Research Partner at a16z crypto. Giulia Fanti is the Angel Jordan Associate Professor of Electrical Engineering at Carnegie Mellon University. She is a co-director of the Initiative for CryptoCurrencies and Contracts (IC3), a member of Department of Commerce Information Security and Privacy Advisory Board (ISPAB), and a member of the UK Financial Conduct Authority's Synthetic Data Expert Group (SDEG). Ben Fisch is an Assistant Professor of Computer Science at Yale University. He is a co-founder of Espresso Systems and has advised several prominent crypto projects, including Chia and Filecoin. Ari Juels is the Weill Family Foundation and Joan and Sanford I. Weill Professor at Cornell Tech and a Computer Science faculty member at Cornell University. He is also a co-director of the Initiative for CryptoCurrencies and Contracts (IC3), Chief Scientist at Chainlink Labs, and author of crypto thriller novel The Oracle. Farinaz Koushanfar is the Nemat-Nasser Endowed Chair Professor of Electrical and Computer Engineering at the University of California San Diego. She is also the founding co-director of the UCSD Center for Machine Intelligence, Computing, and Security (MICS), and a Research Scientist at Chainlink Labs. She is a fellow of ACM, IEEE, and the National Academy of Inventors (NAI). Andrew Miller is an Adjunct Associate Professor of Electrical and Computer Engineering at the University of Illinois at Urbana Champaign. He is also a co-director of Flashbots[X], a co-director of Initiative for CryptoCurrencies and Contracts (IC3), and a board member of Zcash Foundation. He has been an advisor to Cycles, Chainlink, Inco, Clique, and Pi2. Ciamac Moallemi is William von Mueffling Professor of Business and the director of the Briger Family Digital Finance Lab at the Graduate School of Business at Columbia University. He is also an advisor to several firms in the blockchain and fintech space. David Tse is the Thomas Kailath and Guanghan Xu Professor of Engineering at Stanford University. He is a member of the National Academy of Engineering, and a recipient of the Claude E. Shannon Award in 2017 and the IEEE Richard W. Hamming Medal in 2019. He is also a co-founder of the Babylon Bitcoin staking protocol, currently ranked 8th in TVL (total value locked) among all DeFi protocols. Pramod Viswanath is the Forrest G. Hamrick Professor of Engineering at Princeton University. He is a core contributor to Sentient. Sign in to access your portfolio
Axios
7 days ago
- Business
- Axios
Latest Senate stablecoin bill addresses foreign issuers, national security safeguards
Since it passed out of the Banking Committee in March, Sen. Bill Hagerty's legislation on issuing stablecoins now specifically has language addressing conflicts of interest and national security protections. Why it matters: Stablecoin legislation in the Senate has addressed many of the Senate Democrats' most pressing concerns, but still carries one notable exception. The big picture: The revised version of the GENIUS Act does more to constrain stablecoin issuers to protect consumers, undermine criminal activity and secure the banking system. "GENIUS now in its current form is more prescriptive. Just in terms of specific requirements," James Rathmell, general counsel of Haun Ventures, tells Axios. Catch up quick: The original legislation that cleared banking in March (S. 394) was a slimmer bill, one that primarily dealt with issuance. The majority leader exercised a special rule to let Hagerty bring a new version to the floor, S. 1582. The Senate agreed to a motion to proceed on the bill, by a vote of 69-31. Zoom in: The details of this legislation have been shifting fast, but these are changes we can see from the published draft: One large issue has been foreign issued stablecoins, such as the world's largest, tether. In order for their stablecoins to trade among U.S. users, under the latest version, foreign stablecoin issuers will have their nation's regulatory regime assessed by the Treasury and other banking regulators for comparability with the U.S. In particular, they will need to have the technological capacity to comply with law enforcement requests, such as seizing and freezing criminal assets (the big stablecoins can do this now), as described in a more detailed anti-money laundering section than that found in the prior version. Between the lines: The teeth in the new version of GENIUS comes in how it deals with non-compliant stablecoins. After three years, no U.S.-based cryptocurrency distributors can touch non-compliant stablecoins, and significant penalties for knowing non-compliance are detailed in the current version. In addition, the new version has other language, including preventing stablecoins from offering yield (Sec. 2), requiring audits, preventing misleading marketing and slightly expanding the list of reserve assets (all in Sec. 4). Yes, but: The elephant in the room is President Trump's family crypto ventures, which have been a stumbling block for pro-crypto members of Congress. The revised GENIUS act introduced new language reiterating existing ethics rules that would prevent federal elected officials from issuing stablecoins, but those rules are generally understood to exempt the president — and enforcement has always been the key issue anyway.
