The Recently Rejected Cryptocurrency Law in the USA Has Been Amended: Some Negatives Added! Here’s What You Need to Know

According to Crypto journalist Eleanor Terrett, the new regulations in the GENIUS bill presented to the U.S. Congress impose significant restrictions on the stablecoin market.

The draft aims to protect investors and to prevent the state from getting involved in stablecoin projects.

One of the most striking provisions in the bill is the prohibition of stablecoin issuers from using terms like "United States", "United States Government" or "USG" in their product names. This step aims to prevent consumers from mistakenly perceiving these assets as being backed by the US dollar or the guarantee of the federal government.

Additionally, false claims that stablecoins are backed by the Federal Deposit Insurance Corporation (FDIC) insurance are also prohibited. According to the bill, no issuer may assert that stablecoins are under the FDIC protection or are backed by the "full faith and credit" of the federal government.

The proposal also significantly restricts technology giants like Amazon, Meta, Google, and Microsoft from issuing stablecoins without being financial institutions. For these companies to enter the stablecoin market, they will need to comply with high levels of financial risk management, data privacy, and fair trading principles. Thus, the aim is to maintain the distinction between banking and commerce.

The bill also includes specific regulations that maintain legal compliance regarding the institutions that can benefit from the services of the FED. Another provision of the bill covers the establishment of mechanisms to protect investors in the event of the bankruptcy of stablecoin issuers.

The new law grants the Ministry of Treasury the authority to suspend the records of exporters in cases of negligent or intentional abuses. While the previous draft only penalized intentional violations, the new regulation allows for serious violations resulting from negligence to also be punished. The law also foresees strong sanctions for illegal transactions carried out through non-compliant exchanges.

The proposal also expands ethical rules for private agents working with the government. Now, individuals working in special status, like Elon Musk, will also be subject to the financial conflict of interest rules of the Government Ethics Office.