Dante Disparte, Circle’s Chief Strategy Officer, shared that a section in the recently passed GENIUS Act is designed to stop large tech companies and banks from taking over the stablecoin market.
Speaking on the Unchained podcast on July 19, Disparte referred to the section as a “Libra clause”.
Banks that plan to offer stablecoins must also follow strict rules. They are required to keep the tokens in a separate legal entity and place them on a balance sheet that does not involve lending, borrowing, or taking financial risks.
Did you know?
Subscribe – We publish new crypto explainer videos every week!
What Are Oracles in Crypto? (Beginner Friendly Animation)
Disparte said this model is stricter than the deposit token systems proposed by some major banks. According to him, these rules are meant to protect users and help maintain trust in the dollar.
Disparte noted that the GENIUS Act gives the US a clear framework in the global competition for digital currencies and offers long-awaited clarity for the crypto industry.
Under the new rules, stablecoin issuers can continue operating under state regulations if their assets stay below $10 billion. If they exceed that level, they must apply for a national trust bank license.
The GENIUS Act also bans interest-earning stablecoins, introduces stronger disclosure rules, and allows criminal charges for issuing unbacked tokens. Disparte said these changes mean experiments like Terra’s will no longer be allowed.
Meanwhile, lawmakers in the United Kingdom recently raised concerns about the use of cryptocurrency in political fundraising, with some calling for an outright ban. What did they say? Read the full story.
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.
