Launchy Regulatory Roundup #30 - Senate Banking Committee Advances GENIUS Stablecoin Bill

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Regulators are tightening their grip on crypto, but who wins in this game of compliance? In the US, the GENIUS Act advances despite Warren’s warnings, while only 10% of Americans support more federal crypto funding. Meanwhile, Europe’s MiCA crackdown could wipe out 75% of VASPs, pricing out small firms with steep compliance costs.

In Today's Edition:

• Headline: Senate Banking Committee Advances GENIUS Stablecoin Bill 🇺🇲 

• Global Legal Roundup: Only 10% of Americans back federal crypto funding 🙅 

• Case Study: 75% of EU VASPs May Shut Down 🛑 

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HEADLINE

Senate Banking Committee Advances GENIUS Stablecoin Bill

State of play: The US Stablecoins (GENIUS) Act advanced in the Senate Banking Committee with an 18-6 bipartisan vote. The bill establishes reserve backing requirements, AML compliance, and safeguards against financial crimes.

• Senator Elizabeth Warren’s proposed amendments, including limiting stablecoin issuance to banks, were rejected.

• Warren argued that the bill could facilitate terrorism financing and sanctions evasion.

• The bill must still pass both chambers of Congress before reaching President Trump for final approval.

The crypto industry views the advancement as a positive step toward regulatory clarity, while traditional banks oppose the legislation, fearing market share erosion from stablecoins.

• Banking lobbyists are pushing back, concerned that stablecoins will disintermediate financial institutions.

• Despite opposition, the bill includes stricter provisions, such as enhanced reserves, AML oversight, and sanctions compliance.

• Treasury Secretary Scott Bessent emphasized stablecoins as a tool to strengthen the US dollar’s global reserve status, a stance supported by the White House.

• Meanwhile, Federal Reserve Governor Christopher Waller argued that non-banks should be allowed to issue stablecoins, citing efficiency and cost savings.

What’s Next: However, passage in the Senate requires 60 votes, necessitating bipartisan support.

Why it Matters: If enacted, the GENIUS Act could mark a significant shift in US stablecoin regulation, shaping the future of crypto finance and banking innovation.

Our Take: With stablecoin issuers among the largest buyers of US debt, policymakers are recognizing their potential role in monetary policy.

GLOBAL LEGAL ROUNDUP

America:

• 🇺🇲 SEC postpones ruling on Fidelity Ether ETF options.

• 🇺🇲 Nebraska governor signs bill to regulate crypto ATMs.

• 🇺🇲 Only 10% of Americans support increasing federal funding for crypto.

• 🇺🇲 Sacks’ VC firm sold $200M+ in crypto, stocks before White House role.

• 🇺🇲 SEC to abandon the effort requiring crypto firms to register as exchanges.

• 🇺🇲 US Rep. Byron Donalds to introduce bill codifying Trump’s Bitcoin reserve.

• 🇦🇷 Argentina finalizes rules for virtual asset providers.

• 🇦🇷 Argentine lawyerrequests Interpol red notice for LIBRA creator.

Europe:

• 🇪🇺 OKX secures MiFID II license in Europe.

• 🇹🇷 Turkey tightens crypto regulations with new rules.

• 🇪🇺 EU watchdogs scrutinizing OKX over Bybit laundered funds.

• 🇫🇷 Telegram founder Pavel Durov given permission to leave France.

• 🇪🇸 BBVA gets regulatory nod to offer Bitcoin and Ether trading in Spain.

• 🇷🇺 Bank of Russia proposes to allow crypto purchases by select investors.

Middle East & Africa:

• 🇦🇪 Ripple secures Dubai license to offer crypto payments in UAE.

APAC:

• 🇹🇭 Thailand regulator approves USDT, USDC stablecoins.

CASE STUDY

75% of EU VASPs May Shut Down

Credits to Slava Demchuk & Cointelegraph for the original article.

State of play: With MiCA regulations now in force, all EU-registered Virtual Asset Service Providers (VASPs) must comply by July 2025 or cease operations.

• Predictions indicate that 75% of VASPs may not meet the requirements, similar to Estonia’s crypto license crackdown in 2019, which reduced licensed firms from 2,000 to 45.

• Countries like Poland and the Czech Republic, which had light registration processes, will see massive license revocations as enforcement tightens.

Key barriers include:

• High compliance costs: MiCA licensing fees range from €30,000 to €80,000, far exceeding past VASP registration costs of €2,000 to €4,000.

• Stringent requirements: Firms must implement AML/KYC protocols, cyber resilience, and data protection while hiring specialized compliance officers.

• Capital constraints: MiCA mandates €50,000 to €150,000 in share capital, which many small firms and startups cannot afford.

Our Take: With compliance costs and regulatory burdens too high, many small crypto businesses may be forced out of the EU market.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our comprehensive database of crypto regulations around the world👇

NOTEWORTHY READS & MEME

• Salah Ghazzal’s read on Stablecoin Bill & billionaires.

• Alex Thorn’s read on GENIUS Act and why it is great for Tether.

• DeFi Education Fund’s article on devs’ liability & 3rd party users actions.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.