U.S. Senate Passes Historic GENIUS Act to Regulate Stablecoins

The U.S. Senate passed the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) on Tuesday evening, with a decisive 68–30 vote. The bill marks the first-ever federal framework aimed at stablecoins, a sector rapidly gaining traction across finance and commerce.

The vote saw a notable crossover: eighteen Democrats sided with nearly all Republicans in backing the legislation. This bipartisan alliance followed earlier procedural hurdles, including a successful cloture vote on June 11 that ended Senate debate at 68–30. Majority Leader John Thune (R‑S.D.) hailed the legislation as a step toward “making crypto a common part of daily life,” echoing sentiments urging the U.S. to become “the world’s crypto capital.”

The Act weaves a comprehensive regulatory tapestry around stablecoins, defining them distinctly as “payment stablecoins” governed by federal standards:

Full Reserve Requirement – All issued stablecoins must be backed 1:1 by liquid assets such as U.S. dollars, Treasury bills, or equivalents.
Monthly Transparency – Issuers must disclose reserves monthly, promoting public trust.
Enhanced Oversight – Any issuer managing over $50 billion in stablecoins is subject to annual audits and federal supervision.
Consumer Safeguards – The bill bans misleading marketing (e.g., implying FDIC insurance or U.S. backing) and ensures holders have super-priority in case of issuer insolvency.
Limits on Corporate Issuers – Non-financial giants like Amazon or Meta can only issue stablecoins if they meet strict risk, privacy, and reserve criteria.
Foreign Issuer Restrictions – Overseas-based issuers, including Tether, must comply with reserve, audit, and transparency mandates to serve U.S. customers.
Conflict-of-Interest Safeguards – The GENIUS Act bars lawmakers and executive officials from issuing stablecoins though critics argue loopholes remain for the President and family.

“Senator Bill Hagerty (R‑Tenn.), a lead sponsor of the bill, stressed its goal to reinforce the U.S. dollar's global dominance and anchor stablecoin innovation domestically. Treasury Secretary Scott Bessent projected the U.S. dollar–backed stablecoin market could reach around $2 trillion by 2028—contingent on effective regulation.”

For the crypto sector, clarity is the catalyst. Major players like Visa, Mastercard, Amazon, and Walmart are already exploring stablecoin applications. U.S.-based issuer Circle (USDC) especially stands to benefit by gaining a competitive edge over overseas-native Tether (USDT), translating the law into market dominance.

Despite broad support, vocal dissent emerged. Senator Elizabeth Warren (D‑Mass.) denounced the bill’s shortcomings on consumer protection and warned it might entrust Trump with authority over his crypto ventures, including World Liberty Financial and its USD1 token. She characterized it as potentially empowering corruption via “presidential favors traded for crypto dollars.”

After passing the Senate, the bill now heads to the House, dominated by Republicans. A House version—the STABLE Act (Stablecoin Transparency and Accountability for a Better Ledger Economy Act)—is also in play. Key differences exist, particularly regarding federal-state dynamics and foreign issuer provisions.

The path forward involves either approving the Senate’s GENIUS Act outright or negotiating a joint compromise via a conference committee. Stakeholders are also watching the related Digital Asset Market Clarity Act (Clarity Act), which aims to define broader crypto classification and oversight—potentially bundled alongside GENIUS.

President Trump has signaled readiness to sign stablecoin legislation before Congress’s August recess, while Treasury leadership has forecasted multi‑trillion‑dollar market potential.

The Senate’s passage of the GENIUS Act marks a historic turning point—shifting from years of digital asset uncertainty toward definitive action. It reflects the influence of crypto-industry lobbying, which reportedly spent hundreds of millions on advocacy.

At its core, the GENIUS Act validates stablecoins as significant financial instruments, yet keeps cautious guardrails around consumer protection, systemic stability, and regulatory oversight. How Congress reconciles Senate and House versions will determine whether this breakthrough becomes law—and how robust America’s rules for digital finance truly are.