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"Next Year's News This Week"
A very Stablecoin GENIUS Act By Berit Anderson ________ Why Read: Legal enforcement of the GENIUS Act will take effect in mid-January, but regulators still aren't sure whether stablecoin should be regulated as currency or securities. An overview of the questions, dynamics, and players shaping this global financial shift. - bba ________ Back in March, I wrote to SNS members about stablecoin in the context of its use by agentic systems. That piece was about the guaranteed chaos of letting unsupervised AI deploy capital seamlessly across the global economy. This week, I'm reporting on the impending US embrace of stablecoin itself. For those not yet following: stablecoin is a new class of cryptocurrency for digital payments that will be officially unleashed on the American economy in January 2027. Unofficially, it's already here and pretty unregulated. Here, from Forbes, is a list of the top 10 fiat-backed stablecoin globally:
Under the GENIUS (Guiding and Establishing National Innovation for US Stablecoins) Act, beginning January 18, any stablecoin issued in the US must be intended for payment; pegged to a fiat currency; and backed 1:1 with US dollars or their equivalent in US Treasury bills, money-market funds, or other approved federal assets. There are two sets of key actors in this market that will be subject to federal regulation: stablecoin issuers and digital-asset service providers. Issuers of stablecoin are exempt from some of the stricter standards applied to banks, but they also generally must be a bank - or other financial institution - to be an issuer. They must be permitted by the Office of the Comptroller, which has its own whole rule set for permitting coming in November. Issuers may use those reserves only for redeeming stablecoins or offering them as collateral in repos (Treasury repurchase agreements) and reverse repos. According to a Congressional overview, they must "establish and disclose redemption procedures" (i.e., how to get your money back). And they must issue periodic reports on their reserves and outstanding coin, certified by company executives and audited by registered public accounting firms.
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