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Key Provisions and New Restrictions
Background of the Bill and Political Controversy
According to the amendments, the bill will prohibit technology giants such as Meta, Amazon, Google, and Microsoft from issuing stablecoins unless they can establish comprehensive financial risk control mechanisms, enhance user data privacy protection, and implement a series of strict regulatory conditions regarding fair business practices.
The amendment also includes protective clauses to ensure that technology companies, even if allowed to issue stablecoins, will not automatically gain eligibility for a master account with the Federal Reserve, thereby undermining the existing financial entry system. Furthermore, the amendment strengthens consumer protection provisions, including:
- Prohibiting any stablecoin issuer from implying that their tokens are backed by FDIC insurance or the credit of the U.S. government;
- Prohibiting the use of government-related terms such as “United States” or “USG” in token naming or marketing elements;
- Granting the Treasury Department greater authority to suspend or revoke the registration of violators;
- Considering each instance of violation as a separate penalty event if the issuer has “intentional or gross negligence.”
The GENIUS Act was originally defeated in a Senate vote on May 8 due to concerns from Democrats regarding potential conflicts of interest involving President Donald Trump and his associated stablecoin issuer, World Liberty Financial (WLFI), leading to a withdrawal of support. Currently, both parties are re-engaging in negotiations to discuss how to amend the provisions to resolve the controversy, with Senate leadership considering resuming discussions before the Memorial Day recess and restarting the legislative process.
