What new crypto law could do, stablecoins explained

After a few political tails, three crypto invoices favored by President Donald Trump received key support for Capitol Hill this week, with one of them, was signed on Friday afternoon. Flush of enthusiasm in the middle of the imminent passage of the Bills, investors raised the three main cryptographic tokens – Bitcoin, Ether and Ripple – to summits of all time. Bitcoin is now the main most efficient asset in the world this year, after climbing almost 30%, exceeding gold and the NASDAQ composite stock index in charge of technology.

The effects of invoices are not immediate, but they will feed the evolution of the cryptography of a niche, the marginal corner of the economy in the dominant current – for better or, well worse – depending on which you ask.

The act of genius

The bill was promulgated on Friday, and the one who could inaugurate the most important changes, is the Genius Act. It opens the way to private companies to issue what are called stablecoins, which are published in deprived of digital money – think of the “Geoffreybucks” of Toys R’us for the 21st century. (Stablecoin’s “stable” part comes from the idea that the value of the tokens would always be equivalent to $ 1.)

While some companies have already issued stablecoins, they operated in a legal gray area. The Genius Act presents specific requirements for companies that issue stablecoins, Like complying with anti-flow and monitoring and monitoring and reporting of suspicious activities. In the eyes of many consumer protection defenders, the requirements are largely inadequate.

“The reason why you would never recommend grandmother to use a stablecoin is that it should give a dollar protected by the federal government and the deposit insurance, and which is accompanied by a ton of consumer protections, and which pays interest in its bank account, in exchange for protection against the Federation of Consumers of America.

Most of the entities that now plan to draw on stablescoins in the middle of the adoption of the engineering law say that they would first use them for largely “back-end” purposes, such as reducing costs paid by merchants to credit card companies or more easily convert currencies from cross-border payments.

Traditional financial institutions are interested. The Wall Street Journal reported that several major American banks, as well as the Zelle payment platform, could speak of delivering a common stablecoin. Although Zelle is free for its users, the cost of execution appears elsewhere in the form of other costs billed by banks.

There is little dispute on the potential of stablecoins to make back-end operations cheaper and more profitable. Stablecoins specific to the company could also allow offers or discounts specially designed on their products if they pay using the company token.

The controversy on them is presented in three parts.

The first is Trump and his family’s interest in Stablecoins – namely that published in March by World Liberty Financial. Launched in 2024, World Liberty belongs to the majority by the Trump organization, although no member of the family was director and that the president previously declared that he was not involved in the active management of the company. Although the World Liberty Stablecoin has not yet obtained a traditional traction, it has already been selected to support an investment of $ 2 billion by Abu Dhabi in the Binance cryptographic society. The co-founder of World Liberty is Zack Witkoff, son of the Middle East of Trump, Steve Witkoff.

The Trump family has made around $ 500 million from World Liberty since the launch of the platform, according to Reuters calculations.

Beyond the conflict of potential interests of Trump, the law on engineering raises the prospect of a proliferation of private stables, which could force consumers to use different currencies at each place where they buy, instead of the old ordinary dollar.

Potential headaches could be resolved via a centralized application, but it would probably mean consumers should create their own cryptographic wallets – a heavy task that also increases hack potential.

The second deeper risk comes from the fact that Stablecoin issuers essentially become their own banks. According to Frayer, the act of engineering essentially allows stablecoin issuers to bypass most regular banking protections and the police themselves – which, according to him, has never led to good results.

Frayer told NBC News that the cryptographic industry quickly formed increasingly centralized entities while jumping headlong in the same risks that led to financial accidents of 1929 and 2008.

“The reason why there is banking insurance and consumer protections is due to the great depression and the great recession,” he said. “If we return to a system with a whole bunch of unregulated banks authorized to issue stablecoins, we will end up with another financial crisis.”

Publication of advocacy consumer reports also opposed legislation, claiming that it did not protect consumers and the economy against the risks posed by stablecoins.

“While stablecoins become more linked to the traditional banking system, consumers and businesses could be exposed to higher risk levels, which can lead to insolent and federal rebellious,” said Delicia Hand, principal director of the digital market at Consumer Reports, in a press release.

In a press release, the leader of the Blockchain Association, a commercial group, praised the law on engineering to offer “tailor -made” rules for the stablecoins.

“This marks a real momentum towards the regulatory clarity that protects consumers, supports innovation and strengthens the strength of the US dollar in the digital economy,” said Summer Mersinger.

The act of clarity

The other two bills under study are more statutory in nature – although there are major implications for the president’s personal businesses. The Clarity Act, now under study by the Senate after receiving the approval of the house this week, is designed to sort the chips in categories which establish more clearly if they must be regulated by the Securities and Exchange Commission or the Commodity Futures Futures Trading Commission – with most falling into this last category.

This has changed certain Democrats and defenders of consumers who say that this could be transformed into a gift of commercial interests increasingly focused on the crypto of Trump, by allowing them to bypass most of the rules of standard securities in favor of less strict regulations on raw materials.

He also withdraws the global freedom of observation of the regulatory examination for his other digital token, known as WLFI. Liberty global tokens had not yet been designated as securities by the dry – and would no longer need if the bill should become law, according to experts.

“The World Liberty Financial affiliated to Trump would be largely exempt from regulatory surveillance if this bill should adopt,” the Americans said in a statement in a statement. “Samecoins, such as the Trump $ Trump room, which has collected the Trump organization, hundreds of millions of dollars in sales costs, even if most investors have lost money on the medal, would also be permanently exempt from regulatory surveillance.”

The bill nevertheless collected bipartite support.

“For too long, for too long, the lack of clear advice on the type of cryptoset is governed by which the agency suffocated the development, investment and responsible entrepreneurship,” said Yuval Rooz, CEO and co-founder of Digital Asset, a blockchain company. “This bipartite effort marks a turning point, recognizing the distinct nature of digital assets and establishing a framework that supports conformity, transparency if necessary and the integrity of the market.

The anti-CBDC law on the state of surveillance

The law on the state of anti-CBDC surveillance, which has also adopted the Chamber this week and is now in front of the Senate, is largely the product of the GOP warnings concerning the introduction of a digital token supervised by the Federal Reserve and the confidentiality problems that could pose.

The bill would prohibit the issue of these tokens or their use for monetary policy.

However, Fed officials said the central bank had never been close to promulgating such a currency.

Other countries, dozens of other countries, as well as the European Union, have progressed with the issue of such tokens noting that they allow faster transactions and make financial tools more accessible.

However, the banking sector has also opposed the creation of a CBDC and has expressed its support for the law.

In a statement, the American Bankers Association said that it “strongly believes that a digital currency of the Central Bank (CBDC) is not necessary in the United States and would present unacceptable risks and costs for the financial system”.

“The issue of a CBDC would fundamentally change the relationship between citizens and the federal reserve, would undermine the important role that banks play in the extension of credit, exacerbate economic and liquidity crises and hinder the transmission of a solid monetary policy,” he said.