- US Senate passed the “GENIUS Act” (68-30) to create a regulatory framework for stablecoins.
- The bill requires stablecoins to be backed by liquid assets and issuers to disclose reserves monthly.
- This is a major milestone for the crypto industry, which has long pushed for regulatory clarity.
In a significant development for the digital asset industry, the US Senate on Tuesday passed a bill aimed at creating a comprehensive regulatory framework for US dollar-pegged cryptocurrency tokens, commonly known as stablecoins.
This bipartisan achievement marks a potential watershed moment, bringing much-sought-after clarity to a rapidly evolving sector of the financial world.
The legislation, officially titled the “Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act,” garnered considerable bipartisan support, with several Democrats joining the majority of Republicans to back the proposed federal rules.
The bill ultimately passed by a decisive vote of 68-30. For the bill to become law, the House of Representatives, which is currently controlled by Republicans, will need to pass its own version.
If successful there, the harmonized legislation will then proceed to President Donald Trump’s desk for final approval.
The passage in the Senate is being hailed as a pivotal step.
“It is a major milestone,” commented Andrew Olmem, a managing partner at the law firm Mayer Brown and the former deputy director of the National Economic Council during President Trump’s first term.
“It establishes, for the first time, a regulatory regime for stablecoins, a rapidly developing financial product and industry.”
Stablecoins, a specific type of cryptocurrency designed to maintain a constant value, typically by pegging 1:1 to the US dollar, are widely used by crypto traders to facilitate the movement of funds between different digital tokens.
Their usage has seen exponential growth in recent years, and proponents argue they hold the potential to revolutionize payment systems by enabling instantaneous transactions.
If enacted, the stablecoin bill would mandate that these tokens be backed by liquid assets, such as US dollars and short-term Treasury bills.
Furthermore, issuers would be required to publicly disclose the composition of their reserves on a monthly basis, enhancing transparency.
Industry advocacy and a push for clarity
The cryptocurrency industry has long advocated for lawmakers to pass legislation creating clear rules for digital assets.
The prevailing argument is that a well-defined regulatory framework could unlock the potential for stablecoins to become more widely adopted and integrated into the mainstream financial system.
Reflecting this push, the sector reportedly spent over $119 million backing pro-crypto congressional candidates in last year’s elections and has consistently sought to portray the issue as a bipartisan concern.
An earlier attempt to pass stablecoin legislation in the House of Representatives last year was successful, but that bill ultimately died in the Senate, where Democrats held the majority at the time and did not bring it up for a vote.
The current momentum reflects a shifting landscape, partly influenced by President Trump, who has sought to broadly overhaul US cryptocurrency policies after actively courting financial support from the industry during his presidential campaign.
Bo Hines, who leads Trump’s Council of Advisers on Digital Assets, has indicated that the White House is keen to see a stablecoin bill passed before August.
Navigating political tensions and lingering concerns
The path to this Senate vote has not been without its challenges. Tensions on Capitol Hill over President Trump’s various personal crypto ventures at one point threatened to derail the digital asset sector’s hopes for legislation this year.
Some Democrats have grown increasingly frustrated with Trump and his family members promoting their personal crypto projects, including a meme coin called $TRUMP launched in January and a crypto company named World Liberty Financial, partly owned by the president.
The White House has maintained that there are no conflicts of interest for Trump, stating his assets are held in a trust managed by his children.
Critics, however, remain vocal. “In advancing these bills, lawmakers forfeited their opportunity to confront Trump’s crypto grift – the largest, most flagrant corruption in presidential history,” asserted Bartlett Naylor, financial policy advocate for Public Citizen, a consumer rights advocacy group.
Other Democratic lawmakers have expressed concerns that the current bill does not adequately prevent large tech companies from issuing their own private stablecoins.
They have also argued for stronger anti-money laundering (AML) protections and more stringent prohibitions on foreign stablecoin issuers.
Senator Elizabeth Warren, a Democrat, voiced these concerns on the Senate floor in May, stating, “A bill that turbocharges the stablecoin market, while facilitating the president’s corruption and undermining national security, financial stability, and consumer protection is worse than no bill at all.”
The road ahead: house deliberations and state regulator input
Despite its passage in the Senate, the stablecoin bill could face further modifications in the House of Representatives.
The Conference of State Bank Supervisors (CSBS) has already called for “critical changes” to the legislation to mitigate potential financial stability risks.
“CSBS remains concerned with the dramatic and unsupported expansion of the authority of uninsured banks to conduct money transmission or custody activities nationwide without the approval or oversight of host state supervisors,” said Brandon Milhorn, president and CEO of the CSBS, in a statement, highlighting ongoing debates about the appropriate balance between federal and state oversight in the burgeoning stablecoin market.
The post US Senate approves GENIUS Act to regulate stablecoins; bill moves to house appeared first on CoinJournal.