The GENIUS Act, Reading Between The Lines

Key Points

1. The GENIUS Act focuses on payment stablecoins and mandates compliance with lawful orders, including freezing, burning, seizure, and blocking transfers, which cannot be implemented by ERC-20 based stablecoins.

2. Payment stablecoin issuers must be regulated by federal agencies like the OCC or state regulators, with provisions for a Stablecoin Review Board and Treasury Secretary to set rules.

3. USDT and USDC do not qualify as U.S. payment stablecoins under the act—USDT due to its offshore base and USDC due to lacking a bank charter, though a safe harbor provision may temporarily exempt Circle.

4. The act emphasizes the need for stablecoins to maintain parity with fiat currency, referencing past incidents like the SVB collapse, where FDIC intervention saved Circle and other startups.

5. The GENIUS Act aims to regulate private stablecoin issuance while avoiding the introduction of CBDCs, focusing on AML, KYC, and maintaining price stability without explicit discussion of par value.