Latest news with #GeniusAct
The Star
4 hours ago
- Business
- The Star
Hong Kong sharpens crypto hub focus amid rising global competition
Hong Kong is intensifying its bid to become a global digital asset (DA) hub with the release of an updated policy statement focused on accelerating stablecoin use and tokenisation efforts, amid renewed momentum in the US this year. 'The government's highly anticipated Policy Statement 2.0, aimed at establishing Hong Kong as a global digital assets hub, comes at a time when Trump 2.0 is trying to make America the 'crypto capital of the planet',' said Andrew Fei, a partner at King & Wood Mallesons in Hong Kong. The city on Thursday released its 'Policy Statement 2.0 on the Development of Digital Assets in Hong Kong', an update to the first blueprint issued in late 2022, which first clarified the government's intent to court cryptocurrency business. Hong Kong is committed to bringing itself 'to new heights of global digital asset leadership' in response to the 'evolving global DA landscape', the Financial Services and the Treasury Bureau (FSTB) said in the policy statement. The document comes as the US has rapidly become a more favourable environment for crypto companies this year, under the friendlier policies of the second administration of President Donald Trump. Cryptocurrency values have surged since his election in November, which has also energised business activity in the sector. Last week, the US Senate passed a bill regulating the use of stablecoins, called the Genius Act, after Hong Kong passed its own law on the assets in May. The Hong Kong ordinance will take effect on August 1. It shows that the 'global race for digital assets innovation is well under way', Fei said. The policy statement introduced what the FSTB called the 'Leap' framework, aiming to streamline the city's legal and regulatory framework for digital assets, expand digital asset product offerings, advance use cases and foster industry talent. These measures signify that Hong Kong is now 'not merely a testing ground for digital assets', but is transitioning towards increasing institutionalisation, scaling and globalisation, according to Xiao Feng, chairman and CEO of HashKey Group, a licensed crypto exchange operator. The city's latest policy statement placed a heavy focus on the tokenisation of real-world assets (RWAs), the process of putting representations of traditional assets on a blockchain. The city 'strives to build a more flourishing DA ecosystem' that will 'bring benefits to both the economy and society', Financial Secretary Paul Chan Mo-po said in a statement on Tuesday. One of the biggest proposals in the new document is for legislators to make tax concessions on profits from digital assets, bringing them into parity with traditional assets such as stocks and bonds. 'RWA tokenisation takes centre stage in the second digital assets policy statement, which makes sense since many predict that tokenisation will grow into a multi-trillion dollar market before the decade's end,' Fei said. Meanwhile, the city is charging ahead with stablecoin development, which industry players are exploring as a cross-border payment tool. Hong Kong's new digital asset blueprint will 'strengthen market integrity, enable diverse activities and high-value transactions', said Tian Gan, CEO of China Asset Management Hong Kong. With the new regulation, which requires licences for issuers, stablecoins will help the city's Web3 ecosystem 'reach a critical breakthrough moment', Gan said. - SOUTH CHINA MORNING POST
Bloomberg
a day ago
- Business
- Bloomberg
House Plans Single Vote to Move Genius and Clarity Crypto Bills
House Republicans aim to get the Senate's landmark stablecoin legislation — known as the Genius Act — to President Donald Trump's desk for signature as soon as the week of July 7, according to people with direct knowledge of the strategy. Their strategy, subject to change, would also allow the House to bring its crypto market-structure bill — known as the Clarity Act — to a full floor vote. The plan calls for the two separate measures to advance in a single procedural vote, the people said, asking not to be identified discussing behind-the-scenes legislative efforts.
The Age
2 days ago
- Business
- The Age
The Genius move that could blow up in America's face
There are already about $US250 billion of stablecoins on issue but, assuming the House endorses the bill (it has previously passed a slightly different version, named the STABLE Act) the legislation is likely to encourage a flood of new issuers. Amazon and Walmart and other retailers, large and small, are said to be preparing to issue their own tokens, along with other participants in payment chains. The major US banks have talked about creating one, the big tech companies would inevitably become involved and, as with the Trumps, there'd be a host of entrepreneurial types entering the sector. A report by Citigroup earlier this year said there could be $US3.7 trillion of stablecoins on issue by 2030, while a US Treasury analysis estimated there'd be $US2 trillion on issue by 2028. The potential benefits of wide use of stablecoins are obvious. They'd cut out the middlemen of finance – the crypto universe is a peer-to-peer one – making merchant fees, interchange fees and wire transfer fees increasingly redundant, along with the waiting for funds to be cleared. That explains retailers' interest in them, and the threat they pose to the major credit and debit card operators. US Treasury Secretary, Scott Bessent, is also enthusiastic about what they might mean for the US dollar and US Treasury market. Loading The dollar and US Treasury securities are already the most common assets used to back stablecoins and could be expected to be the assets of choice for tokens issued within the framework established by the Genius Act. That would provide a massive new source of demand for the dollar and Treasury securities, buttressing the dollar's global dominance and lowering the US government's cost of funds, or at least that's Bessent's theory. In practice, most of the funds to provide the dollar-for-dollar backing for the stablecoins would probably come from traditional finance sources – banks and money market funds being the most obvious. The flows of US dollar assets would be redirected, rather than new sources tapped. That's an important point, because it means deposits could be withdrawn from highly-regulated and, for deposits of less than $US250,000 in the US, insured environments into one that is far less onerously regulated and where the funds would not be insured. Unlike bank deposits, where the Federal Reserve Board backstops the system, there would be no lender of last resort (one of the BIS criticisms), fewer protections against the use of the tokens for illicit activities (another) and they don't have the capacity that banks have to create money (yet another weakness identified by the BIS). Unlike a US dollar, which is trusted and accepted almost universally, there is no guarantee that a $US1 dollar stablecoin will actually be worth a dollar, or be accepted by everyone as a medium of exchange. If the forecasts of the extent to which the stablecoin issuance could grow are correct, they could have an impact on the stability of the US and potentially other banking systems. They would convert largely retail deposits, which are generally stable and are covered by federal insurance, into more volatile and uninsured wholesale deposits. The regional banking crisis in the US in 2023 was triggered by a run on Silicon Valley Bank's wholesale deposits. Under the Genius Act, stablecoin issuers would be required to hold $US1 of easily cashable assets for each $US1 of stablecoins. It's relatively easy for the issuers to acquire US Treasury bills, or repurchase agreements backed by Treasury securities or cash to match new deposits. If there were, however, a sudden flood of redemption requests and a need to cash out the underlying assets urgently – if the issuer had to dump assets to raise cash in the face of what, in a bank, would be a 'run' – there would be a likelihood of losses on the face value of the Treasury bills and other assets in a forced sale. Some existing stablecoins have traded well below par. With no guarantor or lender of last resort, any liquidity event in a stablecoin would spark a frenetic scramble for the exit by investors, exacerbating the losses and raising the spectre of contagion for the rest of the sector. While the Genius Act makes it explicit that the stablecoins wouldn't be guaranteed by the government or have access to the Fed's facilities, if there were a sector-wide implosion and trillions of dollars of Treasury securities and bank deposits were being dumped into the markets, the pressure for the White House to intervene would be extreme. It would be even more extreme if the president at that moment had a multi-billion exposure to the stablecoin market. The act prohibits members of Congress or the US executive branch from owning or issuing stablecoins, but an attempt by the Democrats to include the president and vice president in that prohibition failed. The other major criticism of the act is that it could create a 'back to the future' moment, a return to a 19th century America where almost anyone could open a bank and issue their own currency as long as they had a dollar of collateral for each dollar they issued. Unlike a US dollar, which is trusted and accepted almost universally, there is no guarantee that a $US1 dollar stablecoin will actually be worth a dollar, or be accepted by everyone as a medium of exchange. Fiat currencies are fungible, crypto assets are not. Each stablecoin could be backed by a different mix of assets and therefore their vulnerability to an external event, or ability to respond to a run, will differ between issuers. Loading Short of real time continuous auditing of every stablecoin issuer, there can't be the same level of trust that there is in the traditional banking and payment systems. By endorsing and providing credibility for stablecoins, however, the US lawmakers are bringing crypto into the mainstream of the US banking and payments systems, fragmenting them to at least some degree and introducing a potential new source of instability.
Yahoo
2 days ago
- Business
- Yahoo
The $51 Billion Crypto Secret: Why Stablecoins Are Now the #1 Tool for Criminals
In a newly released report, the Financial Action Task Force (FATF) says stablecoinsthose dollar-pegged crypto tokens everyone's trying to mainstreamare now the most commonly used tools for illegal activity on the blockchain. From fraud rings to North Korean hackers, illicit actors are increasingly moving money through stablecoins, especially Tether on the Tron network. The FATF highlights how stablecoins' key strengthslow cost, high speed, and price stabilityare also exactly what criminals want. And while global oversight is improving, the task force says major blind spots remainespecially around unhosted wallets that operate outside traditional financial systems. Warning! GuruFocus has detected 6 Warning Sign with META. Meanwhile, Washington is moving in the opposite direction. The U.S. Senate just passed the Genius Act, aimed at pulling stablecoins into the regulatory fold and making them more accessible to the public. That's triggered a wave of activity. Circle (NYSE:CRCL), the issuer of USDC, went public earlier this month, and its stock has already jumped more than 6x. A company linked to Donald Trump's familyWorld Liberty Financial now pushing its own stablecoin initiative. On the surface, it looks like the U.S. is all-in. But the FATF warns that as these tokens become more embedded in daily finance, their misuse could scale just as fast. The bigger picture? Roughly $51 billion in fraud- and scam-related on-chain transactions took place in 2024 alone, according to the report. And while stablecoins could one day sit quietly in the background of the financial system, like the Bank for International Settlements recently noted, that's far from guaranteed. Especially not with decentralized apps muddying the waters, and enforcement lagging behind innovation. FATF says it's drafting new rules for stablecoins due next year. Until then, investors eyeing the spaceespecially names like Circlemight be riding a powerful growth story... with regulators closing in fast. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data
USA Today
2 days ago
- Business
- USA Today
Genius Act explained: What the new Senate bill means for cryptocurrency investors
On June 17, the U.S. Senate officially passed the Guiding and Establishing National Innovation for U.S. Stablecoins (Genius) Act, which will create a federal regulatory framework for stablecoins. The bill will now head to the House for review, with a final signature by President Donald Trump expected before the end of the summer. As might be expected, crypto market participants widely hailed the news, and stocks tied to stablecoins surged. Here's what you need to know. A genius move? The Genius Act will become the first major piece of crypto legislation passed by the Trump administration, which came into office promising a huge overhaul of the crypto sector. Previous actions, such as creation of the Strategic Bitcoin Reserve, occurred only via executive order. The Genius Act legislation is important because it helps to define the playing field for stablecoins, which have been one of the fastest-growing sectors of the crypto market. In 2020, stablecoins were valued at about $20 billion; today, they're valued at $250 billion. According to Treasury Secretary Scott Bessent, they have the potential to be worth as much as $2 trillion in just a few years. What are stablecoins? Simply stated, stablecoins are digital currencies that are pegged 1:1 to the value of another asset. In 90% of the cases, stablecoins are pegged 1:1 to the U.S. dollar. But there's no reason a stablecoin couldn't be pegged to, say, the Japanese yen. These stablecoins can be used to facilitate international trade, make digital payments, and participate in the world of decentralized finance (the blockchain version of traditional finance). The Treasury Department has even hinted that stablecoins could become a tool to reduce the nation's $37 trillion debt load and bolster the value of the dollar. Potential genius investment opportunities The good news is that there are several different ways to participate in this growing investment trend. The most obvious way, of course, is to invest in one of the top stablecoins. Right now, the two big stablecoins are Tether (CRYPTO: USDT) and USDC (CRYPTO: USDC), and together, they account for nearly 85% of the value of the $250 billion stablecoin industry. However, unless you're planning to participate in decentralized finance via new stablecoin yield strategies, you'll be holding an asset that will always be valued at $1. That's what makes these coins stable — they're always supposed to hold their value since they're backed by cash. For that reason, they're often referred to as digital dollars. The next option is to invest in one of the top stablecoin issuers. The popular pick right now is Circle Internet Group (NYSE: CRCL), the issuer of the USDC stablecoin. On June 5, Circle went public via an initial public offering (IPO) and has been absolutely on fire since then. Circle is the only publicly traded pure-play stablecoin issuer, which helps to explain why investors just can't seem to get enough of it. However, other publicly traded companies have either launched stablecoins of their own or are planning to do so in the future. For example, PayPal (NASDAQ: PYPL) launched a stablecoin back in August 2023. And just as news was breaking about the passage of the Genius Act, the Wall Street Journal reported that both Amazon (NASDAQ: AMZN) and Walmart (NYSE: WMT) are exploring stablecoins of their own. What could possibly go wrong? New stablecoin legislation is a big step forward for the crypto market. As Trump noted in a social media post, the legislation will make the U.S. the "UNDISPUTED Leader" when it comes to digital assets. The stablecoin industry looks ready to explode in value over the next few years, and the U.S. should be a key player. But here's the thing: Stablecoins — which are supposed to be stable — have the potential to be extraordinarily volatile. That's what happened during the previous crypto bull market rally, when a popular stablecoin (TerraUSD) suddenly lost its peg to the dollar, costing investors billions of dollars and causing a cascading series of events that eventually contributed to the so-called crypto winter of 2022. Moreover, potential conflicts of interest could cause investors to lose faith in stablecoins. It's important to note that World Liberty Financial, a crypto venture affiliated with the Trump family, recently launched a stablecoin of its own. That has some politicians — including some senators who voted against the Genius Act — asking very serious questions about stablecoins. Still, it's hard not to be excited about stablecoins. They seem poised to revolutionize the world of finance, and just about everyone — from Wall Street bankers to Washington politicians — seem to be embracing them. It doesn't take a genius to understand that investing in this new trend early could be one way to lock in impressive long-term returns. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Dominic Basulto has positions in Amazon, Circle Internet Group and USDC. The Motley Fool has positions in and recommends Amazon, PayPal and Walmart. The Motley Fool recommends the following options: long January 2027 $42.50 calls on PayPal and short June 2025 $77.50 calls on PayPal. The Motley Fool has a disclosure policy. The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY. 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