US Senate Passes Landmark GENIUS Act, Paving Way for Stablecoin Regulation Amidst Political Scrutiny
On Tuesday, the U.S. Senate passed the GENIUS Act in a bipartisan vote of 68 to 30. This is the first time in U.S. history that there will
Quick overview
- The U.S. Senate passed the GENIUS Act with a bipartisan vote of 68 to 30, marking the first government regulations for stablecoins in U.S. history.
- The bill aims to establish a regulatory framework for stablecoin issuers, requiring them to back their tokens with liquid assets and comply with anti-money laundering rules.
- Despite industry enthusiasm, some Democrats express concerns over potential conflicts of interest and the adequacy of consumer protections in the bill.
- If passed by the House and signed into law, the GENIUS Act could significantly influence the future of cryptocurrencies and the U.S. dollar's role in the global digital economy.
On Tuesday, the U.S. Senate passed the GENIUS Act in a bipartisan vote of 68 to 30. This is the first time in U.S. history that there will be government rules for stablecoins.
The Guiding and Establishing National Innovation for U.S. Stablecoins Act is a big step forward for digital assets. It brings the U.S. closer to becoming the world’s leader in regulating cryptocurrencies. The bill is now going to the House of Representatives, which is controlled by Republicans. There, it will be looked at more closely before it might reach President Donald Trump’s desk.
Tennessee Senator measure Hagerty, who wrote the measure six weeks ago, said, “With this bill, the United States is one step closer to becoming the global leader in crypto.” “When the GENIUS Act is passed, businesses of all sizes and people all over the country will be able to settle payments almost instantly instead of having to wait days or even weeks.”
The bill’s passing is a big change from May, when it failed a cloture vote because Democrats were against it because of Trump’s ties to Bitcoin. The Trump family owns a large part of World Liberty Financial, which created its own USD1 stablecoin in March. This raised concerns about possible conflicts of interest.
Regulatory Framework Takes Shape
The GENIUS Act would compel stablecoin issuers to back their tokens with liquid assets like U.S. dollars and short-term Treasury bills at a rate of 1:1. Companies would also have to follow anti-money laundering rules, go through regular audits, and make their reserve compositions public every month.
The law deals with a market segment that is growing very quickly and has seen huge growth in the last several years. Stablecoins are digital currencies that are meant to keep their value stable, usually by being tied to the U.S. dollar. Many crypto traders utilize them, and big companies are looking into them as a way to make digital payments.
In a message on social media on Tuesday, Treasury Secretary Scott Bessent talked about the market’s potential. He said that “recent reporting projects that stablecoins could grow into a $3.7 trillion market by the end of the decade.”
Industry Enthusiasm Meets Political Resistance
The crypto business has been pushing for clearer rules for a long time so that more people may use stablecoins. In the most recent elections, they spent more than $119 million supporting pro-crypto candidates for Congress. JPMorgan, Bank of America, Wells Fargo, and Citigroup are all looking into stablecoin projects. On Tuesday, JPMorgan said it would make its own token, JPMD.
Some Democrats still don’t like the bill, though, since they think it doesn’t have enough protections. Senator Elizabeth Warren said that the law might “actively facilitate” misuse linked to Trump’s crypto firms and called it “worse than no bill at all.”
Critics have suggested changes to stop elected officials and their family from making stablecoins. This directly addresses worries about the Trump administration’s crypto projects, such as the $TRUMP meme currency that came out in January.
Global Financial Implications
Supporters say that the GENIUS Act might make the U.S. dollar stronger in the global digital economy, especially because Trump’s tariffs have led to more talk about de-dollarization. Tether’s USDt and Circle’s USDC are the two biggest stablecoins. Together, they make up $217.5 billion, or 86.4% of the overall $251.7 billion stablecoin market. They are both tied to the dollar.
Bill Sebell of the XDC Foundation remarked, “Dollar-backed stablecoins are the new 21st-century financial power tool.” “Anyone with a smartphone can hold a compliant digital dollar, which makes USD more useful and accessible just when critics say it will lose value.”
In the House, the bill’s future is still up in the air. It might be changed again to address worries about financial stability, bank funding patterns, and overseas stablecoin issuers. David Sacks, Trump’s crypto czar, said in May that the president would back bills passed by the Republican-controlled Congress.
Trump wants to be the first “crypto president” of the United States and is pushing for stablecoin legislation before Congress takes its summer break in August. The GENIUS Act is a key moment in the meeting of traditional banking and digital innovation. If the law passes, it could change the way cryptocurrencies work and set a standard for how new financial technologies are governed in the US.
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