The Senate on Tuesday passed the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, a bill that establishes federal oversight for US dollar-pegged stablecoins. The legislation, a first-of-its-kind globally, also creates a regulated path for private entities to issue digital dollars with federal approval. The bill passed with a 68-30 vote, marking a significant moment for the digital asset industry.
Senator Kirsten Gillibrand (D-N.Y.), a sponsor of the bill, stated that “The GENIUS Act will protect consumers, enable innovation, and safeguard the dominance of the U.S. dollar.” The bill’s passage marks a turning point for the digital asset sector’s political influence, an industry that invested substantial funds in the 2024 election cycle, contributing to what is now seen as a pro-crypto Congress.
The GENIUS Act sets clear rules for stablecoin issuers, including requirements for full reserve backing, monthly audits, and compliance with anti-money laundering (AML) regulations. These guardrails aim to bring stability and transparency to a market that has grown to over $250 billion, with Treasury Secretary Scott Bessent projecting it could expand to over $2 trillion in the coming years. The bill increases the number of entities allowed to issue stablecoins, now including banks, fintech enterprises, and large-scale retailers, and aims to facilitate the integration of stablecoins into existing payment systems. The bill grants the Treasury Secretary authority over this new framework.
Despite its passage, the GENIUS Act faced a complex path to the Senate floor. Initially seen as one of the easier crypto bills to pass, it took months of negotiations and even failed a cloture vote in May before gaining sufficient bipartisan support. Eighteen Democrats ultimately joined most Republicans in supporting the measure, a testament to intense discussions and compromises on key provisions. Senators Bill Hagerty and Cynthia Lummis, key proponents of the bill, spoke on the matter – Hagerty stated the journey to secure votes was “murder,” while Lummis remarked, “It has been extremely difficult. I had no idea how hard this was going to be.” The final version of the bill included changes addressing Democratic concerns, such as consumer protection safeguards and limits on tech companies issuing stablecoins.
The bill’s passage was not without dissent. The vote drew sharp condemnation from Senator Jeff Merkley, who charged that Republicans were ‘rubberstamping Trump’s crypto corruption’ and facilitating the President’s ability to ‘sell access to the government for personal profit.’ Merkley had attempted to introduce an amendment to bar public officials from profiting personally from digital assets, but reported that GOP lawmakers thwarted attempts for a direct vote. In May, Senate Democrats, led by Merkley and Minority Leader Chuck Schumer, had introduced the “End Crypto Corruption Act.”
With Senate approval, the GENIUS Act proceeds to the House of Representatives, which is Republican-led and is developing its own stablecoin legislation called the STABLE Act. While both bills prohibit yield-bearing consumer stablecoins, they differ on regulatory oversight. The Senate’s version centralizes authority with the Treasury, while the House’s bill splits oversight among the Federal Reserve, the Comptroller of the Currency, and other agencies.
