Latest news with #GuidingandEstablishingNationalInnovationforUSStablecoinsAct
Business Recorder
4 days ago
- Business
- Business Recorder
GENIUS Act, 2025 versus VAO, 2025
The global proliferation of crypto and virtual assets has triggered an urgent regulatory response across jurisdictions. The ability of digital assets to democratize finance and fuel innovation is matched only by the risks they pose in the hands of bad actors, including money launderers, terrorist financiers, and unregulated entities. Against this backdrop, legislative efforts in the United States and other regions have focused on a dual goal, fostering innovation while protecting consumer interests and financial stability. The United States' recently enacted Guiding and Establishing National Innovation for US Stablecoins Act, commonly referred to as the Genius Act, 2025 ['the Act'], is emblematic of this delicate balancing act. As Pakistan begins its regulatory path with the Virtual Assets Ordinance, 2025 [VAO, 2025], it is important to adopt a comparative perspective. The Act, signed into law in July, is a significant piece of legislation establishing a robust federal framework for issuance and oversight of payment stablecoins. At its core, the Act delineates a categorical distinction between 'permitted payment stablecoin issuers' and all other actors, mandating that only federally or state-qualified issuers are legally allowed to issue stablecoins in the United States. The Act explicitly prohibits issuance or sale of stablecoins by non-permitted entities after a three-year transition period, thereby closing the door on regulatory arbitrage and unlicensed operations. The legislative architecture of the Act places enormous emphasis on prudential regulation. The Act mandates a 1:1 reserve backing for all issued stablecoins, allowing only specific high-quality liquid assets such as treasury bills, insured deposits, and overnight repurchase agreements. Rehypothecation of reserves is strictly prohibited, and issuers must maintain monthly disclosures verified by registered public accounting firms. Moreover, stablecoin issuers are bound by strict anti-money laundering (AML), sanctions compliance, and customer due diligence obligations under the Bank Secrecy Act. These standards position stablecoins more akin to bank-issued financial products than unregulated digital tokens. The Act further carves out the scope of permissible activities for issuers, limiting their operations to issuance, redemption, and reserve management, and explicitly prohibits offering interest or yield on stablecoins. This restriction is aimed at preventing the emergence of quasi-banking entities and ensuring that stablecoins are used solely for payments and settlements. Furthermore, the Act establishes a rigorous vetting process for public companies seeking to issue stablecoins, particularly those not primarily engaged in financial services, thereby safeguarding integrity of the financial system from commercial exploitation of user data and behavioral analytics. A unique feature of the Act is its embrace of federal-state dualism. State-qualified issuers are permitted, provided their regulatory frameworks are substantially like the federal regime. The Stablecoin Certification Review Committee, comprising top federal financial authorities, oversees certification and annual recertification of state regimes. This structure balances federal uniformity with state innovation, fostering a harmonized yet flexible regulatory environment. On the contrary, jurisdictions like the European Union (EU) and the United Arab Emirates (UAE) have taken parallel, yet distinct, regulatory approaches. EU's Market in Crypto-Assets (MiCA) Regulation is comprehensive, covering a broad spectrum of crypto assets including utility tokens, asset-referenced tokens, and e-money tokens. Unlike the Act's laser focus on stablecoins, MiCA provides a pan-European licensing regime and subjects issuers to capitalization, governance, and whitepaper disclosure requirements. Meanwhile, UAE's Virtual Assets Regulatory Authority (VARA) in Dubai offers a layered licensing model, emphasizing operational segregation, cybersecurity, and real-time audit requirements. VARA's risk-based approach is technologically agile and emphasizes regulatory sandboxes to foster innovation. Additionally, MiCA and VARA address the same foundational concerns, consumer protection, market integrity, and financial stability, but they adopt divergent tactics. MiCA leans toward harmonization and centralized oversight via the European Securities and Markets Authority (ESMA), whereas VARA champions bespoke compliance, dynamic risk scoring, and modular regulation. The Genius Act, on the contrary, injects a strong banking ethos into the crypto realm, creating a regulatory perimeter that closely mirrors traditional financial institutions. Turning to Pakistan's VAO, 2025, one finds a nascent but ambitious attempt at entering the regulated crypto economy. The Ordinance establishes a dedicated regulatory authority with powers to license, supervise, and sanction Virtual Asset Service Providers (VASPs). It introduces registration requirements, capital adequacy norms, and fit-and-proper criteria for directors and senior management. Like the Act, the VAO, 2025 mandates AML compliance and allows for enforcement actions against non-compliant actors. However, its scope is broader in defining 'virtual assets', encompassing not just stablecoins but all forms of digital tokens. Despite its breadth, the VAO, 2025 suffers from operational and structural deficiencies. Unlike the Act, which delineates the exact composition of permissible reserves, redemption procedures, and auditing norms, Pakistan's framework remains vague on critical prudential aspects. There is no explicit requirement for 1:1 reserve backing or a monthly third-party audit. Moreover, the VAO, 2025 lacks a clearly defined licensing pipeline with timelines, appeal mechanisms, or transparency in decision-making. The Act, on the contrary, stipulates defined review periods, hearing rights, and judicial recourse, making it procedurally robust and constitutionally sound. Another fundamental shortfall in VAO, 2025 is the absence of tiered regulatory pathways for different scales or types of VASPs. The Act allows for a threshold-based transition to federal oversight when stablecoin issuance surpasses US$10 billion, preserving scalability and regulatory proportionality. In Pakistan's case, theVAO, 2025 does not differentiate between fintech startups and large-scale platforms, thereby imposing a one-size-fits-all compliance burden that could stifle innovation. From a critical standpoint, while the Act advances the regulatory frontier by establishing clear lines of authority, prudential discipline, and enforcement tools, it also leans heavily toward centralization. The exclusion of non-permitted entities, prohibition of interest-bearing features, and constraints on product design might overturn the growth of DeFi applications and algorithmic stablecoins. The Act, in essence, privileges safety over innovation, a trade-off that may not sit well with proponents of crypto-native decentralization. However, the VAO, 2025 reflects an intent to integrate into the global regulatory fabric, but lacks the depth and precision necessary for effective enforcement and industry confidence. Absence of granular compliance obligations, definitional clarity, and regulatory sandboxes indicates a policy framework still in its formative stage. Without substantive revisions, the Ordinance risks being perceived as an aspirational document rather than an enforceable regulatory instrument. To enhance its standing as a crypto-friendly jurisdiction, Pakistan must pivot toward a more standardized and dynamic regulatory architecture. This includes codifying explicit reserve management protocols, enabling tiered licensing models, establishing sandbox environments for innovation testing, and ensuring alignment with Financial Action Task Force (FATF) standards on virtual assets. Pakistan should also consider bilateral cooperation with regulatory authorities in advanced jurisdictions to foster knowledge sharing and cross-border compliance harmonization. Only through such comprehensive reforms can Pakistan transform its VAO, 2025 into a credible, innovation-friendly, and enforcement-ready framework that attracts investment, safeguards consumers, and fortifies financial integrity in the digital asset space. (Huzaima Bukhari & Dr Ikramul Haq, lawyers and partners of Huzaima & Ikram, are Adjunct Faculty at Lahore University of Management Sciences (LUMS), members Advisory Board and Visiting Senior Fellows of Pakistan Institute of Development Economics (PIDE) and Abdul Rauf Shakoori is a corporate lawyer) Copyright Business Recorder, 2025
Mint
7 days ago
- Business
- Mint
America's Genius Act for crypto regulation shows no ingenuity
If this session of the US Congress is remembered for anything, it may be for poorly named legislation. First there was the One Big Beautiful Bill, which wasn't. Now there is the Genius Act, which isn't. The Guiding and Establishing National Innovation for US Stablecoins Act, which Congress passed this week, would regulate stablecoins and effectively transform them from a security to a means of payment. While there is a need for some regulation, as some retailers are considering issuing their own stablecoins, mainstreaming cryptocurrency is hardly a genius move. The bill would introduce a tremendous amount of risk to the financial system and to consumers. And for what purpose? The US already has a means of payment—it's called the dollar—and it works pretty well. For most of crypto's history, its use case, other than paying for goods and services in the underground economy, has been unclear. Tokenization does have the potential to make payments quicker and more efficient. Also read: Mint Explainer: CoinDCX loses $44 mn to hackers. Why are crypto firms especially vulnerable? The big problem has always been volatility: Cryptocurrencies are not a stable store of value, and therefore not a useful means of payment. Stablecoins solve this by striving to maintain a dollar peg. They can do this in several ways, the most common of which is to use low-risk assets such as Treasury bills as backing. This will not produce a perfect peg to the dollar. The exchange rate between the dollar and Tether, the most popular coin backed mostly by Treasury bills, still fluctuates. It is more stable than an unhedged cryptocurrency, but not perfect. Crypto coin issuers are very similar to banks of the 1830s, which also issued their own currencies and were regulated by the states. In a similar spirit, under the Genius Act, companies that issue less than $10 billion worth of coins would also be regulated by the states while the US Federal Reserve would regulate bigger issuers. The thing about the 1830s is that the system was very chaotic. Constant oversight was necessary, because any hint of currency devaluation created bank runs and failures. States had different standards, and several underregulated their local banks, creating a lack of confidence in the system. Back then consumers had no choice, as no universal fiat currency was widely available. Today, of course, Americans can just use dollars. Vendors don't have to worry that their value will fluctuate and holders don't have to worry that it will collapse. The central bank will ensure that it doesn't. And despite the occasional bout of inflation, the Fed has a great track record. Also read: Subhash Chandra Garg: Don't vacillate on a regulatory framework for crypto assets Mainstreaming stablecoins also poses risks to the financial system. Stablecoin issuers are already becoming a major source of demand for US Treasuries. Tether purchased more than $33 billion of them last year and now owns more than Germany. If the market takes off, some banks estimate stablecoin issuers could be a captive buyer for trillions of dollars in Treasuries. The government might find that extra demand appealing, as it would help keep rates low. But it also introduces systemic risk. If there is ever a run on a large coin, all these Treasuries would need to be sold quickly—potentially causing a financial crisis or risking a bailout. It's worth asking what the benefits of the Genius Act might be. It would make payments more efficient than the current system of using banks and credit and debit cards—which all charge non-trivial fees. But for stablecoin issuers to turn a profit, they'd also have to charge fees. Currently they earn most of their revenues from returns on their reserve assets. But to comply with effective regulation or just inspire confidence, these assets need to have a stable price (relative to the dollar) and be perfectly liquid. In other words, they have to be the kind of asset that pays no return. The only way to make money while also paying compliance costs would be to charge fees. Probably not much less than what credit-card companies or banks charge. There are also concerns specific to the Genius Act itself: There is not enough regulatory scrutiny, so illicit use would still be possible. There are inadequate provisions for bankruptcy and for enforcement. And then there are concerns about conflicts of interest—particularly with the president, whose family issues its own coins. But the biggest question is why the US government wants to make it easier to use stablecoins as a means of payment. Not only does it create needless risk, but it also undermines the government's own function as the issuer of the dollar. Also read: Defence alert: Crypto is turning into a geopolitical weapon The Bank for International Settlements (BIS) has a better idea: To get the benefits of cryptocurrency while minimizing risks, and to better integrate blockchain technology into central banking, just tokenize the US dollar. ©Bloomberg
Sinar Daily
21-07-2025
- Politics
- Sinar Daily
Trump and Epstein: What was their relationship?
Trump, then a property mogul and self-styled playboy, appears to have known Epstein, a wealthy money manager, since the 1990s. 21 Jul 2025 09:15am US President Donald Trump arrives to sign the GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins Act), which codifies the use of stablecoins -- cryptocurrencies pegged to stable assets like the US dollar or US bonds -- in the East Room of the White House in Washington, DC, on July 18, 2025. - (Photo by BRENDAN SMIALOWSKI / AFP) WASHINGTON - Donald Trump's past ties with Jeffrey Epstein are under scrutiny after the US president slammed a Wall Street Journal report that he sent a lewd letter to the infamous sex offender as "fake news." AFP looks at the pair's relationship as the Trump administration also faces demands to release all government files on Epstein's alleged crimes and his death. - Parties and private jets - Trump, then a property mogul and self-styled playboy, appears to have known Epstein, a wealthy money manager, since the 1990s. They partied together in 1992 with NFL cheerleaders at Trump's Mar-a-Lago resort in Florida, according to footage from NBC News, which shows the pair talking and laughing. The same year, Epstein was Trump's only guest at a "calendar girl" competition he hosted involving more than two dozen young women, The New York Times reported. In a display of their close ties, Trump flew on Epstein's private jet at least seven times during the 1990s, according to flight logs presented in court and cited by US media. He has denied this, and in 2024 said he was "never on Epstein's plane." In 1993, according to The New York Times, Trump allegedly groped swimsuit model Stacey Williams after Epstein introduced them at Trump Tower -- a claim the president has refuted. Separate from his links to Epstein, Trump has been accused of sexual misconduct by around 20 women. In 2023, he was found liable of sexually abusing and defaming American journalist E. Jean Carroll in a civil trial. - 'Terrific guy' - Virginia Giuffre, one of Epstein's main accusers who died by suicide this year, said she was recruited into his alleged sex-trafficking network aged 17 while working at Trump's Mar-a-Lago club in 2000. Giuffre claimed she was approached there by Ghislaine Maxwell, who was jailed in 2022 for helping Epstein sexually abuse girls. US Attorney for the Southern District of New York Geoffrey Berman points to a photo of Jeffrey Epstein while announcing charges against Epstein during a news conference on July 8, 2019 in New York City. - (Photo by STEPHANIE KEITH / GETTY IMAGES NORTH AMERICA / AFP) Trump seemed to be on good terms with Epstein during this time, praising him as a "terrific guy" in a 2002 New York Magazine profile. "He's a lot of fun to be with. It is even said that he likes beautiful women as much as I do, and many of them are on the younger side," Trump said. In 2003, according to a Wall Street Journal report, Trump penned a letter for Epstein's 50th birthday featuring a drawing of a naked woman, with his signature "Donald" mimicking pubic hair. His apparent message -- Trump dismissed the letter as a "fake thing" -- read: "Happy Birthday -- and may every day be another wonderful secret." - 'I wasn't a fan' - The pair reportedly had a rupture in 2004 as they competed to buy a waterfront property in Florida, which Trump eventually snagged. The two men were hardly seen together in public from that point. Trump would later say in 2019 that they had a "falling out" and hadn't spoken in 15 years. Shortly after the property auction, police launched a probe that saw Epstein jailed in 2008 for 13 months for soliciting an underage prostitute. He was arrested again in 2019 after he was accused of trafficking girls as young as 14 and engaging in sexual acts with them. Trump, then serving his first term as president, sought to distance himself from his old friend. "I wasn't a fan," he told reporters when the charges were revealed. In 2019, Epstein was found hanging dead in his prison cell awaiting trial. Authorities said he died by suicide. Since then, Trump has latched onto and fueled conspiracy theories that global elites including former president Bill Clinton were involved in Epstein's crimes or death. Those same theories now threaten to destabilise Trump's administration, despite his attempts to dismiss the saga as a "hoax" created by political adversaries.- Ben Turner / AFP
United News of India
19-07-2025
- Business
- United News of India
Trump signs GENIUS Act into Law, declares US ‘Crypto Capital of the World'
Washington July 19 (UNI) US President Donald Trump today signed into law the GENIUS Act, a landmark bill that establishes a regulatory framework for payment stablecoins, marking a pivotal moment in America's digital currency policy. Formally titled the Guiding and Establishing National Innovation for US Stablecoins Act, the legislation is designed to regulate dollar-backed stablecoins and bolster the US position in the global crypto economy. 'I pledged that we would bring back American liberty and leadership and make the U.S. the crypto capital of the world,' Trump said at the signing ceremony. 'The GENIUS Act creates a clear and simple regulatory framework to unleash the immense promise of dollar-backed stablecoins.' Flanked by crypto industry leaders and Republican lawmakers who sponsored the bill, Trump used the occasion to tout America's return to financial and technological dominance. 'They named it after me,' he said. "This could be perhaps the greatest revolution in financial technology since the birth of the internet itself. A lot of people are saying that," Trump said. "What do you guys think? If you say yes, I'm saying yes." "Nobody's gained the respect in such a short period of time," Trump said. "This signing is a massive validation of your hard work and your pioneering spirit and your ability to never give up." The White House, in an official statement, confirmed: 'On Friday, July 18, 2025, the President signed into law S.1582, the GENIUS Act, which provides for the regulation of payment stablecoins, and for other purposes.' The law's passage follows a bipartisan 308–122 vote in the House, overcoming earlier opposition from a bloc of Republicans over policy disagreements. It is the first US legislation of its kind focused solely on the stablecoin sector, which has grown rapidly in recent years, CNN reported. Some Democrats, however, like Massachusetts Sen. Elizabeth Warren, the top Democrat on the Senate Banking Committee, have argued that the bill does not contain sufficient safeguards for consumers, national security, or financial stability, while also criticizing the Trump family's ties to crypto, CNN reported. UNI AAB
Time of India
19-07-2025
- Business
- Time of India
‘Named it after me': Trump signs GENIUS Act; calls it ‘hell of an act' to cement US dominance
US President Donald Trump on Friday signed into law the "Guiding and Establishing National Innovation for US Stablecoins Act" or the GENIUS Act, a sweeping legislation aimed at regulating payment stablecoins. The White House said the law would also serve broader purposes in shaping financial innovation. In his remarks at the signing ceremony, Trump joked, 'The GENIUS Act — they named it after me. This is hell of an act!' He described the move as a major step in cementing American dominance in the global digital currency space. "This afternoon, we take a giant step to cement American dominance in global finance and crypto technology, as we sign the landmark GENIUS Act into law," Trump said. The President acknowledged the contributions of several industry leaders and applauded the resilience of the crypto community. 'For years, you were mocked and dismissed and counted out... this signing is a massive validation of your hard work and your pioneering spirit and your ability to never give up... Congratulations on this incredible achievement!' he added. The legislation provides a regulatory framework for dollar-backed stablecoins, which Trump said could trigger the 'greatest revolution in financial technology since the birth of the internet.' by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Dhaka Knee Pain Treatments Might Surprise You Knee Pain Treatment | Search Ads Undo He also reaffirmed his opposition to the creation of a Central Bank Digital Currency, declaring, 'It won't happen.' Treasury Secretary Scott Bessent praised the law on social media, crediting Trump's leadership and Senator Bill Hagerty's work. 'Blockchain technologies will power the next generation of payments, and the US dollar is coming onchain... The GENIUS Act will help cement the US dollar as the global reserve currency for generations to come,' he posted on X.
