The Senate voted 66-22 to advance the law on engineering, showing a strong support of Democrats and Republicans and pointing that the United States government is finally ready to take cryptographic regulations seriously.
The act always raises concerns as to whether it goes too far or not enough in consumer protection and whether it will harm innovation.
Supporters say that the bill will open doors for more companies to enter the market safely and create better tools for Payments and financing. However, criticism warns that the genius law can be too soft on risky or too hard players for small startups and innovators who cannot meet all new requirements.
Supporters say that the bill ensures consumer safety
Supporters of the Genius Act believe that the bill helps prevent disasters such as the collapse of Terra Luna in 2022, which caused billions of losses and sent shock waves throughout the industry. The law reduces the risk that parts suddenly lose their value by forcing stable suppliers to keep 100% of safe asset reserves such as American cash or cash bills so that consumers cannot withdraw.
The law also guarantees that consumers manage more than $ 50 billion in stablescoins publish monthly reports on their reserves and go through annual financial audits to help buyers trust the documents they use or have because the company keeps its promises. If a Stablecoin company collapses, the Genius Act gives priority daily users when they recovered their money.
Critics, including senator Elizabeth Warren, argue that the law is not enough to prevent powerful people from using stablescoins for personal purposes while influencing public policy. For example, the bill does not deal entirely with Trump's stablecoin, which was created by a cryptographic company linked to the president.
The law, says Senator Warren, will allow anonymous buyers, foreign governments and large companies to use stablecoins to hide money, escape regulations and perhaps obtain special treatment such as forgions or special provisions of civil servants who have conflicts of interest.
Warren and other criticisms fear that the system will collapse once again if the companies follow the rules on paper but engage in an imprudent behavior of practice – only this time, losses would probably be more important, especially if foreign actors or large companies abuse the system without being identified in time.
Supporters argue that the law provides new startups and banks established with clear rules to follow. They say that companies will create useful tools that will attract responsible investors, encourage long -term planning and introduce creative solutions.
Supporters also believe that the establishment of strict standards will allow companies to compete according to the quality of their services.
Critics say that strict rules harm small startups
On the other hand, criticisms fear that the strict rules of the engineering law only work for large companies and eliminate small innovators, because it obliges companies to create separate subsidiaries to issue stablecoins.
Opponents also fear that the long list of bills monthly reserve reports of the bill, annual audits, liquidity rules and marketing limit requirements can ensure that small teams or international developers wish to build for American users feel blocked.
It is also feared that if only a few large companies control the majority of the Stablescoin market, they could define the terms for everyone and cause less diversity in products, less choice for consumers and more market power in the hands of a few companies.
We must find a fair balance between safety and growth
The law on engineering is a historic stage in the order of stablecoins because, for the first time, stablecoin issuers will have to respond to clear federal laws, depending on what supporters say they have been expected for a long time.
However, criticisms are not mistaken when they say that important protections are missing, because the bill could do more to limit political influence, protect users from abuses and make room for new voices and ideas on the market. Many fear that the law will promote powerful players to the detriment of small innovators and everyday users.
However, the act of genius remains a step, but if it advances the United States, back or on the side will depend on the way it is applied, its evolution and which it really serves in the long term.
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