The US Senate has passed the Guiding and Establishing National Innovation for U.S. Stablecoins Act, known as the GENIUS Act, by a vote of 68-30. This landmark bill aims to establish a regulatory framework for stablecoins, a type of cryptocurrency pegged to the value of an asset like the U.S. dollar. The legislation represents a significant step towards bringing the $250 billion stablecoin market under federal oversight and is viewed by many in the crypto industry as a crucial step toward legitimizing digital assets and reassuring consumers.
The GENIUS Act outlines requirements for permitted issuers, redemption practices, and federal-state regulatory coordination. It defines a "payment stablecoin" as a digital asset used for payment and settlement, where the issuer is obligated to convert, redeem, or repurchase it for a fixed amount of monetary value. Importantly, the bill explicitly states that a payment stablecoin is not a security, commodity, national currency, or deposit, and does not offer interest payments.
Under the GENIUS Act, stablecoin issuers would be required to register with the US government and maintain a 1:1 reserve backing for their stablecoins, with reserves held in assets such as cash, short-term Treasuries, and government money market funds. Issuers would also face regular audits and be required to comply with Anti-Money Laundering (AML) regulations. The bill creates both federal and state regulatory options for stablecoin issuers. Issuers with a total market capitalization of less than $10 billion can opt for regulation under a state-level regulatory regime, while larger issuers would be subject to federal oversight.
The passage of the GENIUS Act follows months of negotiations and revisions. An initial vote failed due to a lack of Democratic support, with concerns raised about provisions related to foreign issuers, AML standards, potential corporate issuance of stablecoins, and potential conflicts of interest related to former President Trump's involvement in the crypto industry. Several changes were made to address these concerns, including requiring members of Congress and Executive Branch officials to disclose stablecoin holdings over $5,000, strengthening bankruptcy protections for bank depositors, and directing the Treasury to issue formal rules for monitoring suspicious transactions.
Despite the bipartisan support, some Democrats remain opposed to the bill, with critics like Senator Elizabeth Warren arguing that it lacks adequate safeguards and could "actively facilitate" misuse tied to Trump's crypto businesses. Warren also expressed concerns that the bill would allow stablecoin issuers to invest in risky assets and engage in risky non-stablecoin activities, while also constraining regulators' ability to apply capital and liquidity safeguards.
Supporters of the GENIUS Act argue that it will foster innovation, strengthen the dollar's power, and create a clear "rulebook" for the global financial system. Senator Tim Scott, Chair of the Senate Banking Committee, stated that the bill is a "win for innovation" that will give entrepreneurs the confidence to build in the United States. Senator Bill Hagerty, the bill's sponsor, emphasized that stablecoins could drive demand for U.S. Treasuries, strengthen the country's fiscal position, and cement the dollar's status as the world's reserve currency.
Following its passage in the Senate, the GENIUS Act will now move to the House of Representatives for further consideration. The House Financial Services Committee has already advanced its own stablecoin legislation, the Stablecoin Transparency and Accountability for a Better Ledger Economy Act, which shares similar goals with the GENIUS Act. If the House passes its version of the bill, the two chambers will need to reconcile any differences before sending the legislation to President Trump to be signed into law. The GENIUS Act represents a significant step forward in the regulation of stablecoins in the United States.
