Dear Subscriber,

By Beth Canova

On Sunday, Dawn Pennington told you that the GENIUS bill passed the Senate.

Next stop, the U.S. House of Representatives.

That bill, focused on the explosive stablecoin sector, is the first major legislative win for crypto, according to CNBC.

For the first time, GENIUS establishes federal guardrails for U.S. dollar-pegged stablecoins, including full reserve backing, monthly audits and anti-money laundering compliance.

Source: CNBC. Click here to see full-sized image.

And it creates a regulated pathway for private companies to issue digital dollars with the blessing of the federal government.

The last bit is big news.

It means institutions like banks, fintechs and even major retailers can integrate stablecoins into existing payment systems.

Just imagine a future where your Amazon or Walmart purchases are covered by stablecoins.

It’s a future that isn’t too far off.

In fact, stablecoin transactions hit $28 trillion last year — surpassing that of Mastercard and Visa combined, according to Deutsche Bank.

It’s no wonder then that the two payment processing giants have been among the first to cross financial markets.

And just yesterday, PayPal announced its deepening partnership with Fiserv to build out its stablecoin payment capabilities.

Source: Fiserv. Click here to see full-sized image.

Already, the stablecoin market is valued at $250 billion.

And according to the U.S. Treasury, it’s on track to hit $2 trillion by 2028.

The current state of stablecoins. Source: US Treasury, Cointelegraph. Click here to see full-sized image.

And the GENIUS act can help get it there.

But that’s not where the regulatory road ends. Or its new rules.

Regulations Reach Beyond Stablecoins

At 3 p.m. Eastern today, Sen. Tim Scott (R — SC) and Sen. Cynthia Lummis (R — Wy) presented the framework of a new bill in the Senate Banking Committee.

Its goal? Outline with additional clarity the rules for digital assets. And introduce a “small, common-sense package of measures directed at preventing money laundering and sanctions evasion.”

According to the framework, this future bill will …

• Define when crypto is a commodity or a security,

• Allow crypto exchanges to register with the Commodity Futures Trading Commission, and

• Reduce the Securities and Exchange Commission’s regulation of digital currencies.

It’s still early days for this new framework.

The committee will need to fine-tune the details before it can hit the floor of the Senate.

But this is exactly what the crypto community has been waiting for.

Once we have clear instruction on when cryptos count as securities versus as commodities will pave the way forward.

Not just for crypto companies scared into silence by the SEC’s past approach of “regulation through litigation” …

But for TradFi companies eager to dip their toes into the crypto waters.

It’s the catalyst that the broad crypto market, particularly blue-chip altcoins, have been waiting for.

Final Thoughts

The regulatory clarity this framework promises can pave the way for new crypto applications and greater institutional investment.

Which in turn will bring new liquidity to the crypto market.

And unlike stablecoins, these cryptos can see their prices rise with renewed interest.

Watching the daily political theater may be boring.

But these regulatory updates could be the most impactful forces on crypto moving forward.

I hope you keep your eye on the prize.

Or, just keep up with our updates here at Weiss Crypto Daily to stay in the know.

Best,

Beth Canova
Crypto Managing Editor