Senate Passes Landmark GENIUS Act: First Federal Framework for Stablecoin Regulation
Polymarket, the online betting platform, is showing an overwhelming 89% chance that the U.S. GENIUS Act will become law before 2026.
Quick overview
- On June 18, 2025, the U.S. Senate passed the GENIUS Act, establishing the first federal regulatory framework for stablecoins with a vote of 68 to 30.
- The act requires stablecoin issuers to maintain full reserves of liquid assets and introduces oversight from the Federal Reserve and the Office of the Comptroller of the Currency.
- Treasury Secretary Scott Bessent predicts the stablecoin market could grow to $3.7 trillion by the end of the decade, potentially attracting major tech companies to create their own tokens.
- While the bill is seen as a step forward for crypto regulation, critics argue it may not adequately address consumer protection and could leave other cryptocurrencies in regulatory limbo.
On June 18, 2025, the U.S. Senate passed a historic bill that set up the first complete federal regulatory framework for stablecoins. The result was 68 to 30. The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act is a big step toward crypto-friendly rules under the Trump administration.
Polymarket, a betting site, says there is an 89% chance that the plan will pass the House and become law before 2026. This demonstrates that people are confident, even though there are still some problems to work out.
Regulatory Framework
The GENIUS Act makes the $260 billion stablecoin market clearer. Stablecoins are digital assets that are linked to stable currencies like the U.S. dollar, which makes them good for payments and trading. Senator Bill Hagerty (R-Tenn.) introduced the bill with support from both parties, including Senators Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.). The bill puts the U.S. in a position to compete with the EU’s established crypto framework.
The new rules say that stablecoin issuers must keep full reserves of liquid assets, such U.S. Treasury notes, to back their tokens. This makes sure that tokens may be redeemed for their face value even if the issuer goes bankrupt. The framework sets up different levels of control. The Federal Reserve oversees stablecoins worth more than $10 billion, while the Office of the Comptroller of the Currency oversees smaller nonbank issuers.
All issuers must get a license and follow the rules against money laundering. To avoid conflicts of interest, the law says that members of Congress and high-ranking executive officials can’t issue stablecoins while they are in office. Critics say that this doesn’t apply to other public figures, like President Trump, whose World Liberty Financial has already launched its own stablecoin.
Impact on the Global Stablecoin Market
Treasury Secretary Scott Bessent says that the stablecoin market might grow to $3.7 trillion by the end of the decade if regulations are clear. The architecture might make digital companies like Apple and Google want to make their own tokens, and it could also provide established banks new ideas to work with.
The crypto sector, which gave a lot of money to pro-crypto candidates in the 2024 elections, was happy about the passage. But Democratic Senator Elizabeth Warren called it “light regulation,” which is like the deregulation that happened before the financial disaster in 2008.
Strategic Implications
The GENIUS Act does more than just make the rules clearer. It also helps the economy by making the dollar more powerful in digital finance around the world. Gracy Chen, a financial analyst, says that reserve requirements linked to U.S. Treasuries might make bond markets more stable and increase demand for dollars around the world. This system might help control the costs of national debt by increasing demand for government bonds as stablecoins grow in popularity.
What’s Next for the GENIUS Act?
President Trump said he would sign the GENIUS Act “with no add-ons” if the Republican-majority House enacted it fast. But there are still problems since lawmakers might introduce amendments that deal with conflicts of interest or gaps in consumer protection.
The law’s restricted focus on stablecoins makes things clearer for that part of the market, but it leaves other cryptocurrencies in a state of regulatory ambiguity. Separate efforts will probably be needed to provide full frameworks for Bitcoin, Ethereum, and other assets.
The GENIUS Act was passed at a very important time, just before the midterm elections in 2026, when priorities could change. The crypto industry’s expanding power through political donations suggests that good laws will keep getting passed.
For this to work, government regulators and the industry must work together well. The framework’s capacity to safeguard consumers while still allowing for innovation and keeping America’s competitive edge will be a key test for future cryptocurrency regulation. This might lead to the U.S. becoming a leader in digital asset innovation.
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