- The US Treasury has sought comments from the public to ensure the smooth implementation of the GENIUS Act.
- The government aims to adopt innovative solutions to prevent the use of digital assets in illicit activities without adding unnecessary burdens to institutions and users.
- Treasury Secretary Scott Bessent said stablecoins are the key to ensuring the US dollar’s dominance in global finance.
The US Department of the Treasury recently released a notice for a Request for Comment related to the government’s implementation of the GENIUS Act. Available on the regulations website, it offers interested parties an avenue to share their insights on innovative methods, techniques, or strategies that regulated institutions should adopt to detect and curb illegal activities involving digital assets.
The request particularly seeks solutions anchored on artificial intelligence (AI), digital identity (DID) verification, application programming interfaces (APIs), and blockchain to address the matter. The Treasury underscored the importance of adopting innovative tools to protect holders of digital assets against cybersecurity risks. However, the Department claimed that it should arrive at a certain balance in mandating their use to prevent unnecessary burdens for financial institutions.
With that, the Treasury asks the public to comment on the effectiveness, costs, privacy, cybersecurity risks, and other considerations related to such tools. The Section 9 (a) provision of the GENIUS Act will entertain the submissions by October 17.
A Guarantee of US Dollar Dominance
Scott Bessent, Secretary of the Treasury, highlighted that the GENIUS Act is an essential factor in ensuring the leadership of the US in digital assets. He believes it will expand dollar access for billions worldwide, boosting demand for US Treasuries, which back stablecoins. The government official pointed out that it would be a win-win scenario for stablecoin users, stablecoin issuers, and the Treasury.
Bessent’s statement, however, garnered mixed reactions from the crypto community on X. One side praised US President Donald Trump’s administration for its strategic move to raise demand for US treasuries and guarantee dollar dominance. It would effectively extend its reach not just across financial institutions abroad but also to anyone using stablecoins.
Additionally, the event catalyzed optimism that the US may not be far from adopting a Bitcoin (BTC) reserve in the federal treasury. As we have discussed earlier, BTC would perfectly fit in ensuring the US dollar’s dominance, as it would result in more demand for stablecoins. Stablecoins serve as the bridge between Bitcoin and traditional finance.
On the other hand, critics sounded the alarm on the potential weaponization of stablecoins, as they claimed that the government could easily order a freeze in these assets. Moreover, others asked which country the US is actually competing against in digital assets, as China, Russia, and other members of BRICS are already reportedly leaning back to gold to reduce their exposure and dependence on the US dollar.
