U.S. Senate Advances GENIUS Act Toward Stablecoin Regulation

6 months ago

KEY FACTS: On June 11, 2025, the U.S. Senate voted 68-30 to advance the GENIUS Act, a bipartisan bill establishing the first federal framework for regulating stablecoins, digital currencies pegged to assets like the U.S. dollar. The legislation, which cleared a cloture vote after revisions addressing consumer protections and conflicts of interest, mandates 1:1 reserve requirements, anti-money laundering compliance, and audits for issuers, while allowing smaller firms to operate under state regulations. Supported by President Trump and crypto advocates, the bill aims to foster innovation, strengthen the U.S. dollar’s role in the digital economy, and potentially drive demand for Treasury securities, with the Senate poised for a final vote soon and the House considering a companion bill.

Source: The U.S. Senate

U.S. Senate Advances GENIUS Act Toward Stablecoin Regulation

The U.S. Senate voted 68-30 on Wednesday to advance the Guiding and Establishing National Innovation for U.S. Stablecoins Act, commonly referred to as the GENIUS Act. The bipartisan vote to invoke cloture, a procedural step to limit debate and move legislation toward a final vote, signals strong momentum for the bill, which could establish the first comprehensive federal framework for stablecoin issuers in the United States. With the crypto industry and key political figures, including President Donald Trump, rallying behind the legislation, the GENIUS Act is poised to reshape the digital asset ecosystem and reinforce the U.S. dollar’s dominance in the global digital economy.

The GENIUS Act, introduced just over a month ago, aims to provide clear regulatory guidelines for stablecoins—digital currencies pegged to the value of traditional assets like the U.S. dollar. Stablecoins, such as Tether’s USDT and Circle’s USDC, have become a cornerstone of the cryptocurrency ecosystem, facilitating transactions and serving as a bridge between traditional finance and blockchain-based systems. With a current market capitalization of approximately $250 billion, stablecoins are projected to grow significantly, potentially reaching $2 trillion by 2028 if supportive legislation is enacted, according to estimates from Standard Chartered.

The Senate’s decision to advance the GENIUS Act follows a contentious journey. An earlier attempt to pass a cloture vote in May failed due to concerns from some Democrats over consumer protections and potential conflicts of interest tied to President Trump’s family crypto ventures. However, revisions to the bill, including stronger anti-money laundering provisions and restrictions on elected officials issuing stablecoins, garnered bipartisan support, with 15 Democrats joining Republicans to clear the filibuster threshold.

Senate Majority Leader John Thune, speaking from the Senate floor, urged lawmakers to support the bill, echoing President Trump’s vision of positioning the United States as the “crypto capital of the world.” Thune emphasized the legislation’s potential to foster innovation while ensuring financial stability. The Majority Leader expressed hope that the House of Representatives would swiftly take up the legislation, potentially sending it to President Trump’s desk within days. In his words:

“This bill sets clear rules for stablecoin issuers, protects consumers, and strengthens the U.S. dollar’s role in the digital economy.”

The GENIUS Act introduces a robust regulatory framework designed to balance innovation with oversight. Key provisions include: 1:1 reserve requirements, mandatory audits, anti-money laundering compliance, and restrictions on elected officials. These provisions aim to legitimize stablecoins as a mainstream payment mechanism while addressing risks to consumers, national security, and financial stability. Industry advocates argue that the clear rules will spur adoption, with stablecoins potentially transforming sectors like payments and remittances by offering faster, cheaper, and more transparent transactions compared to traditional fiat systems.

The GENIUS Act’s advancement reflects a rare moment of bipartisan cooperation in a polarized Congress. Crypto-friendly Democrats, including Senators Angela Alsobrooks and Mark Warner, joined Republicans in supporting the bill after revisions addressed some of their concerns. David Sacks, President Trump’s top adviser on crypto and artificial intelligence, hailed the cloture vote as a “big win for crypto,” predicting that the bill’s passage could unlock “trillions of dollars” in demand for U.S. Treasuries by encouraging stablecoin growth.

However, not all senators are on board. Critics, including Senators Elizabeth Warren, Jeff Merkley, and Senate Minority Leader Chuck Schumer, have raised alarms about potential loopholes and weak consumer protections. They have proposed amendments to strengthen safeguards, particularly targeting provisions that could allow President Trump or his family to profit from stablecoin ventures like World Liberty Financial.

Senator Josh Hawley, a Republican from Missouri, has also emerged as a vocal opponent, arguing that the bill could enable Big Tech companies to issue stablecoins without sufficient oversight, potentially leading to increased data collection on users’ finances. Hawley’s concerns echo those raised in 2019 when Meta’s Libra (later Diem) project was abandoned amid regulatory pushback from figures like Federal Reserve Chair Jay Powell.

The concerns notwithstanding, the GENIUS Act’s is seen as a stepping stone toward broader crypto regulation, with companion legislation like the CLARITY Act, which recently passed the committee markup phase, aiming to clarify the roles of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) in overseeing digital assets. Industry leaders view the GENIUS Act as a potential catalyst for global stablecoin regulation.

With the cloture vote secured, the GENIUS Act now moves to a full Senate floor debate, followed by a final vote that requires only a simple majority to pass. Senate Banking Chair Tim Scott has indicated that a broader crypto regulation bill may be considered in July, but the stablecoin legislation is expected to take precedence due to its bipartisan momentum.

If the Senate approves the GENIUS Act, it will head to the House of Representatives, where a companion bill, the STABLE Act, is under consideration by the Financial Services Committee. House Majority Whip Tom Emmer and Representative Bryan Steil have expressed optimism about aligning the House and Senate versions, though differences in approaches to non-financial companies issuing stablecoins may require negotiation.

The Senate’s advancement of the GENIUS Act marks a historic milestone in the regulation of stablecoins, offering a glimpse into a future where digital currencies could become a mainstream component of the financial system. While challenges remain, including reconciling amendments and addressing concerns about conflicts of interest, the bill’s bipartisan support underscores its potential to transform the U.S. financial landscape.

Information Sources:

If you found the article interesting or helpful, please hit the upvote button and share for visibility to other hive friends to see. More importantly, drop a comment below. Thank you!

This post was created via INLEO. What is INLEO?

INLEO's mission is to build a sustainable creator economy that is centered around digital ownership, tokenization, and communities. It's built on Hive, with linkages to BSC, ETH, and Polygon blockchains. The flagship application, Inleo.io, allows users and creators to engage & share micro and long-form content on the Hive blockchain while earning cryptocurrency rewards.