The US Senate has passed an amended version of the Guiding and Establishing National Innovation for US Stablecoins, or GENIUS Act in a Tuesday vote of 68-30.
The vast majority of the US Senate chose to pass it only about six weeks after Senator Bill Hagerty (R-TN) introduced the legislation. The bill’s companion, the STABLE Act, may be considered in the House of Representatives next, where it could face additional proposals for amendments.
“With this bill, the United States is one step closer to becoming the global leader in crypto,” said Hagerty from the Senate floor before the vote, adding: “Once the GENIUS Act is law, businesses of all sizes, and Americans across the country will be able to settle payments nearly instantaneously rather than waiting for days or sometimes even weeks”.
House Committee on Financial Services Chairman French Hill (R-AZ) issued the following statement following Senate passage of the GENIUS Act: “Clear rules of the road for stablecoins are long overdue, and today we’re one step closer to creating a functional regulatory framework. I applaud the Senate’s passage of the GENIUS Act and the work of [Banking Committee] Chairman [Tim] Scott, Senator Hagerty, and Senator [Cynthia] Lummis to make this historic day a reality. I look forward to working with my House colleagues to bring much-needed clarity and protections to the digital asset ecosystem.”
Touted as a milestone day for the crypto industry, which put about $250m into the 2024 presidential election cycle, the legislation brought together legislators from both parties. At voting time, 18 Senate Democrats ultimately supported it.
“The GENIUS Act will protect consumers, enable responsible innovation, and safeguard the dominance of the U.S. dollar,” said Senator Kirsten Gillibrand (D-N.Y.) who was one of the sponsors of the bill, in a statement last month.
Senator Mark Warner (D-VA) touted its passage as well, saying: “For too long, stablecoins have operated in a regulatory gray area, putting consumers, markets, and national security at risk. The GENIUS Act changes that by creating guardrails for responsible innovation, setting high standards for issuers, and reining in potential abuses by big tech and bad actors.”
Guardrails for the industry
The GENIUS Act sets guardrails for the industry, including full reserve backing, monthly audits, and anti-money laundering compliance requirements. It also opens the door to a broader range of issuers, including banks, fintechs, and major retailers looking to launch their own stablecoins or integrate them into existing payment systems.
The US House has its own version of a stablecoin bill dubbed STABLE. Both bills prohibit yield-bearing consumer stablecoins, but they diverge on who regulates what. The Senate’s version centralizes oversight with Treasury, while the House bill splits authority between the Federal Reserve, the Comptroller of the Currency, and others.
The GENIUS Act restricts non-financial large tech companies from directly issuing stablecoins unless they establish or partner with regulated financial entities — a provision meant to address monopoly concerns.
Stablecoins are a subset of cryptocurrencies pegged to the value of real-world assets. About 99% of all stablecoins are tethered to the price of the US dollar.
Trump’s crypto holdings
The bill passed the chamber without amendments to address Donald Trump’s connections to World Liberty Financial’s stablecoin, which many Democrats had been calling for. World Liberty Financial issued its own USD1 stablecoin in March.
Democrats tried to amend the bill to prevent the president from profiting off crypto ventures, but the final legislation only bars members of Congress and their families from doing so.
Senator Warner addressed this point in his statement, saying he and many of his colleagues will have “deep concerns about how members of the Trump family have used crypto technologies to evade scrutiny, conceal financial entanglements, and profit off the public trust.” But he said “outrage over that corruption cannot prevent us from building a foundation for responsible innovation in this space.”
It’s unclear whether the stablecoin legislation will have enough support to pass in the House, where Republicans also hold a slim majority over Democrats. Trump’s AI and crypto czar, David Sacks, suggested in May that the president would support the bill passed by a Republican-controlled Congress.
Should payment stablecoins be recognized in a US regulatory framework, it could potentially open the floodgates for companies to issue their own tokens. Apple, Google, social media platform X and Airbnb were reportedly looking into the matter during the legislative debate on the GENIUS Act.
Looking ahead at the growing marketplace, US Treasury Secretary Scott Bessant said on Tuesday: “Recent reporting projects that stablecoins could grow into a $3.7 trillion market by the end of the decade. That scenario becomes more likely with passage of the GENIUS Act.”
