The U.S. Treasury Department is receiving feedback from the crypto industry on the stablecoin-focussed GENIUS Act that was signed into law in July by U.S. President Donald Trump. This week, Circle and Coinbase submitted their respective inputs on the legislation.
The GENIUS Act explains that permitted stablecoin issuers need to maintain enough reserves to back their stablecoins in 1:1 ratio with the USD or r other similarly liquid assets. The stablecoin issuers, as per the act, have also been asked to publicly disclose their redemption polic and reserve details on a monthly basis.
Circle’s feedback
Circle, the issuer of the USDC stablecoin, called the GENIUS Act a “momentous” turning point for the future of digital dollars.
Among key recommendations on the legislation, Circle said that all digital assets mimicking compliant stablecoins must face the same strict reserve maintenance obligations as approved issuers. The idea is to maintain financial stability and consumer protection.
It further said that the requirement of capital and liquidity for stablecoin issuers must be risk-based that focusses on operational, technological, and infrastructural risks rather than just scaling with circulation.
Circle has called for the need for clarity on global interoperability of stablecoins. The company said that the Treasury should explain how stablecoin transactions will be supported by international fiat conversion and called for strong partnerships with the global banking ecosystem.
Furthermore, Circle has suggested that the Treasury department must set clear consequences for non-compliant stablecoin players.
“We support full and faithful implementation of GENIUS to create a consistent national regime for permitted payment stablecoin issuers, regulated foreign payment stablecoin issuers, and the consumers who rely on them,” Circle said in its statement.
Review from Coinbase
Coinbase has chimed in with Circle in calling for clarity on penalty provisions for rule violators under the GENIUS Act. In its feedback to the Treasury, the exchange recommended that any prohibition on paying interest on stablecoins should be limited only to the actual issuers, while firms like crypto exchanges which do not issue them, should be exempted from the ban.
Coinbase’s suggestions on the GENIUS Act focussed on three key pointers – clarity on penalties on rule breakers, keeping the rules intact as drafted in the passed Act, and designing a supportive network for onshore adoption, issuance, and growth.
“Treasury must be mindful where definitions in GENIUS are clear on their face. Attempting
to impose requirements that contradict the statutory text would deter payment stablecoin
adoption and innovation in the U.S.,” Coinbase said.
About the implementation of the GENIUS Act
U.S. President Donald Trump signed the GENIUS Act into law on July 18. As per reports, the law is slated to go into effect either 18 months after enactment or 120 days after receiving the regulators’ approvals related to the implementation.
Along with Coinbase and Circle, other crypto players are also submitting their responses on the GENIUS Act.
The Treasury is presently assessing feedback on the legislation from the crypto industry.