Historic Breakthrough in US Crypto Regulation.
The GENIUS Act just passed the Senate with 18 Democrats crossing party lines.
The bill contains THREE game-changing provisions the media isn't reporting.
You won't believe what you're about to hear.
A Thread 🧵
The GENIUS Act just passed the Senate with 18 Democrats crossing party lines.
The bill contains THREE game-changing provisions the media isn't reporting.
You won't believe what you're about to hear.
A Thread 🧵
The GENIUS Act represents the biggest financial legislation shift since Glass-Steagall.
$264 billion in stablecoins exist today. 67% controlled by offshore entities.
The legislation creates a framework to bring this massive market onshore.
$264 billion in stablecoins exist today. 67% controlled by offshore entities.
The legislation creates a framework to bring this massive market onshore.
Provision #1: Fed backstop access for stablecoin reserves.
Bloomberg reported from "senior Treasury officials" at a June 18th Milken meeting that stablecoins would receive the same liquidity treatment as money market funds.
This fundamentally changes the risk profile.
Bloomberg reported from "senior Treasury officials" at a June 18th Milken meeting that stablecoins would receive the same liquidity treatment as money market funds.
This fundamentally changes the risk profile.
Provision #2: $200 tax exemption for retail stablecoin payments.
A leaked Treasury slide deck shows transactions under $200 would be exempt from capital gains reporting.
Smart policy that removes the primary friction preventing mainstream consumer adoption.
A leaked Treasury slide deck shows transactions under $200 would be exempt from capital gains reporting.
Smart policy that removes the primary friction preventing mainstream consumer adoption.
Provision #3: Bankruptcy priority for stablecoin holders.
The bill grants stablecoin holders senior status over ALL other creditors in bankruptcy proceedings.
This makes digital dollars safer than traditional bank deposits. No other country offers this level of protection.
The bill grants stablecoin holders senior status over ALL other creditors in bankruptcy proceedings.
This makes digital dollars safer than traditional bank deposits. No other country offers this level of protection.
Current market breakdown:
• Tether (offshore): $159B
• Circle (US-regulated): $63B
• PayPal USD: $10.2B
As @DavidSacks noted, this bill brings the whole stablecoin industry onshore. The trend is already accelerating.
• Tether (offshore): $159B
• Circle (US-regulated): $63B
• PayPal USD: $10.2B
As @DavidSacks noted, this bill brings the whole stablecoin industry onshore. The trend is already accelerating.
The regulatory framework establishes:
• 100% reserves in Fed deposits or Treasury bills ≤90 days
• Quarterly GAAP audits with 45-day reporting
• T+2 redemption guarantee
• Criminal penalties: 10 years prison + $1M fines per violation
• 100% reserves in Fed deposits or Treasury bills ≤90 days
• Quarterly GAAP audits with 45-day reporting
• T+2 redemption guarantee
• Criminal penalties: 10 years prison + $1M fines per violation
The enforcement mechanism is unprecedented.
Offshore issuers targeting US users must relocate within 12 months or face criminal penalties starting day 366.
Treasury targets $3.7 trillion market size by 2030 - a 14x increase that positions America perfectly.
Offshore issuers targeting US users must relocate within 12 months or face criminal penalties starting day 366.
Treasury targets $3.7 trillion market size by 2030 - a 14x increase that positions America perfectly.
Economic impact projections:
• 142,000 new American jobs
• $9.8 billion in tax revenue over 10 years
• Estimated 24 basis point reduction in Treasury bill yields
Major banks are already prototyping deposit-backed stablecoins. The market response validates this approach.
• 142,000 new American jobs
• $9.8 billion in tax revenue over 10 years
• Estimated 24 basis point reduction in Treasury bill yields
Major banks are already prototyping deposit-backed stablecoins. The market response validates this approach.
Timeline for implementation:
• Presidential signature: Day 0
• Treasury regulations: 180 days
• License applications due: 270 days
• Full compliance: 12 months
Offshore issuers must redomicile or face enforcement starting day 366.
• Presidential signature: Day 0
• Treasury regulations: 180 days
• License applications due: 270 days
• Full compliance: 12 months
Offshore issuers must redomicile or face enforcement starting day 366.
The geopolitical dimension matters most.
China is developing yuan-based stablecoins through Hong Kong.
GENIUS positions the US private sector to scale dollar-denominated alternatives first.
This preserves dollar dominance in the digital age.
China is developing yuan-based stablecoins through Hong Kong.
GENIUS positions the US private sector to scale dollar-denominated alternatives first.
This preserves dollar dominance in the digital age.
As @DavidSacks said: "This is a fantastic bill... a major piece of legislation."
Clear rules, strong protections, economic opportunity, and strategic positioning.
The GENIUS Act will be studied as a model for decades.
Clear rules, strong protections, economic opportunity, and strategic positioning.
The GENIUS Act will be studied as a model for decades.
Thanks for reading.
If you enjoyed this post, follow @karlmehta for more content on AI and politics.
Repost the first tweet to help more people see it:
Appreciate the support.
If you enjoyed this post, follow @karlmehta for more content on AI and politics.
Repost the first tweet to help more people see it:
Appreciate the support.
https://twitter.com/20891198/status/1944022700185596083
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