Bipartisan bills set rules for cryptocurrency. Will digital money go mainstream?
Poised to enact its first major legislation regulating cryptocurrency, the United States is pushing digital money into the mainstream.
The first of three bills, which cleared its final hurdle in the House on Thursday, would create a regulatory framework for a special kind of cryptocurrency, known as stablecoins. The House also passed two other crypto-related bills Thursday, establishing new rules for the largely unregulated digital money while banning the nation’s central bank from issuing its own version. These bills now go to the Senate, while the stablecoin measure, already passed by the Senate, goes to President Donald Trump to sign.
The trio of bills could make digital money more common and less risky, allowing electronic dollars to travel the world more cheaply and almost instantaneously.
Why We Wrote This
In a bipartisan effort, Congress is moving to regulate cryptocurrencies for the first time. This could enhance the credibility of digital money and extend the dollar’s dominance with a new generation of currency.
The legislation “definitely helps legitimacy,” says Scott Baker, a finance professor at the Wisconsin School of Business at the University of Wisconsin-Madison. The technology is likely to be seen as more stable and less “fly-by-night,” he says, adding that it may take some time before employers routinely use the digital money to pay their overseas employees or consumers buy goods abroad without having to pay foreign-exchange fees.
Rules of stability
President Trump is expected to sign the stablecoin legislation, known as the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) quickly. Stablecoins are a form of crypto whose value is pegged to a particular currency, usually the dollar. Already passed by the Senate with bipartisan support, the bill easily won House approval 308-122.