The Senate Banking Committee just sent a stablecoin bill to the full chamber for debate. The committee’s markup on the GENIUS Act was a key step in advancing a stablecoin bill, and the committee voted 18-6 to send the bill to the Senate floor, with five Democrats voting yes.

GENIUS stands for the bill’s longer name: ‘‘Guiding and Establishing National Innovation for US Stablecoins of 2025,” and it has the stated purpose of crafting a clear regulatory framework for payment stablecoins.

Senate Banking Committee Chairman Tim Scott (R-SC), one of the five bipartisan sponsors of the bill, said this in a statement about it: “This bipartisan agreement – the result of negotiations with stakeholders, industry, and members of both parties – will protect consumers and expand financial inclusion for Americans across the country.

“Stablecoins enable faster, cheaper, and competitive transactions and facilitate seamless cross-border payments. This legislation will ensure the industry can innovate and grow here in the United States while promoting the US dollar’s global position.”

Amendments and wait time

The GENIUS Act establishes clear procedures for institutions seeking licenses to issue stablecoins and delineates the supervisory, examination, and enforcement regimes for stablecoins.

Although a package of six amendments was approved during the markup, many others presented by Democrats were voted down.

Among the amendments passed in the markup session was one requiring character and fitness reviews by regulators of any officers or principals of stablecoin issuers, and one preventing issuers from using deceptive names. Another addressed bankruptcy, giving super priority to customers over other creditors with respect to stablecoin reserves.

Senator Mark Warner (D-Va) said he wouldn’t have supported it without the amendments that passed, which he contends tighten Bank Secrecy Act assurances.

The bill is now in the hands of Senate Majority Leader John Thune, who will decide when it hits the floor.

Banks and fintechs rally

There has been a growing acceptance among regulators around the world in relation to stablecoins – the digital currency that is designed to hold a constant value of a dollar per coin.

And some of the world’s largest banks and fintech firms are rushing to launch their own stablecoins, aiming to grab a slice of a cross-border payments market they expect will be redrawn by cryptocurrency.

Last month the CEO of Bank of America (BofA), Brian Moynihan, said he was open to having BofA issue its own coin, joining payments providers such as Standard Chartered, PayPal, Revolut and Stripe in targeting a stablecoin issuance business that has been dominated by cryptocurrency entities such as Tether and Circle. “If they make that legal, we will go into that business,” said Moynihan, speaking at the Economic Club of Washington last month.

Although stablecoins have typically been used to shift money between differing cryptocurrencies, they are growing in popularity as an alternative to local banks for payments, particularly in commodities, agriculture and shipping.

Some of the larger banks have been holding out for Congress to fashion rules around them and make ordinary consumers more confident in using them.

Bank regulators, too

The Office of the Comptroller of the Currency issued guidance earlier this month stating that national banks can engage in certain cryptocurrency-related activities. This guidance served to rescind a Biden-era requirement that they need to first obtain supervisory non-objection from the agency before doing so.

Interpretive Letter 1183 states that national banks and federal savings associations are permitted to participate in crypto-asset custody, certain stablecoin activities, and independent node verification networks such as distributed ledger without having to first show they have adequate controls in place.