"Genius Act" passes, SEC chairman speaks out: properly balancing "innovation exemptions" related to cryptocurrency regulation.

After the landmark stablecoin bill was passed earlier on Thursday in the U.S. House of Representatives, Securities and Exchange Commission (SEC) Chairman Paul Atkins stated that the commission is considering a regulatory "innovation exemption" aimed at encouraging tokenization. At a press conference, Paul Atkins stated, "Staff is considering what other changes within our regulatory framework might be appropriate to incentivize tokenization, including an innovative exception that would allow for new trading methods and narrower relief measures to facilitate the development of other components of the tokenized securities ecosystem." On July 17th, the U.S. House of Representatives passed the "Guidance and Establishment of the U.S. Stablecoin National Innovation Act" (Genius Act) with 308 votes in favor and 122 votes against, aiming to make significant legislative reforms to cryptocurrency regulation. The bill will now be submitted to President Trump and is expected to be signed into law. Additionally, the House also passed the broader cryptocurrency market structure bill, the "Clarity Act," with 294 votes in favor and 134 votes against, which will be reviewed by the Senate and aims to establish a more comprehensive and industry-friendly regulatory framework for digital assets. Paul Atkins welcomed the passage of the Genius Act, calling stablecoin legislation a "historic step towards making the U.S. the global capital of crypto." The bill establishes regulatory rules for stablecoins pegged to the U.S. dollar, requiring issuing institutions to hold reserves in short-term U.S. government bonds or similar products regulated by state or federal regulatory authorities on a 1:1 basis. He told reporters that the agency looks forward to "establishing clear rules of the road" in the digital asset space. Supporters argue that this legislation could unleash faster and lower-cost payment methods and bring legitimacy to the current $265 billion market. Citigroup analysts project that the market could grow to $3.7 trillion by 2030. However, some Democrats, such as Senator Elizabeth Warren, have criticized the bill as inadequate to protect consumers. In contrast to his predecessor Gary Gensler, Paul Atkins has taken a markedly different stance on cryptocurrency issues. Gary Gensler was often criticized for regulating the industry through enforcement actions. Earlier, Paul Atkins stated that he plans to repeal many rules from the Gary Gensler era, including a regulatory framework that allows brokers to serve as custodians of digital assets. At a time when the SEC is considering a potential "innovation exemption," some financial institutions are working to tokenize popular U.S. stocks, while others are attempting to create tokenized products for privately held companies. In response to this, Paul Atkins stated, "It's hard to predict exactly how things will unfold, but it is certain that assets are migrating to the chain. If an asset can be tokenized, it will be tokenized."