U.S. Senate passes Genius Act to regulate stablecoins

In a historic vote, the U.S. Senate has passed the GENIUS Act, a bipartisan bill aimed at establishing federal rules for stablecoins.

According to a CNN report, on June 17, the bill cleared the Senate with strong bipartisan support in a 68-30 vote, with 18 Democrats joining most Republicans. Only two Republicans, Sen. Rand Paul of Kentucky and Sen. Josh Hawley of Missouri, voted against it.

The bill now heads to the House of Representatives, where House Majority Whip Tom Emmer has urged the Financial Services Committee to advance stablecoin legislation by the end of July.

The Guiding and Establishing National Innovation for U.S. Stablecoins Act, as it is officially known, establishes the first comprehensive federal framework for the issuance of stablecoins. Under the act, only qualified issuers, such as subsidiaries of insured banks or licensed state entities, can issue payment stablecoins.

Smaller issuers may function under state supervision, but those with more than $10 billion in circulation will be subject to federal regulation. 

Along with stringent consumer protections, the bill mandates monthly public reserve disclosures, annual audits for issuers with a market capitalization of more than $50 billion, and 100% reserve backing in U.S. dollars or short-term Treasuries. It prohibits issuers from marketing stablecoins as “FDIC-insured” or backed by the U.S. government.

Supporters say the bill will bring much-needed clarity to the crypto space, strengthen the U.S. dollar’s role in digital finance, and protect consumers. Sen. Bill Hagerty (R-TN), the bill’s sponsor, called it a pivotal moment for U.S. innovation. “This bill will cement U.S. dollar dominance, protect customers, and drive demand for U.S. Treasuries,” Hagerty said on the Senate floor.

The bill faced earlier opposition from some Democrats, who were concerned about Donald Trump’s crypto dealings. However, following weeks of negotiations, a revised version of the bill that included stronger national security, ethics, and anti-money laundering protections won over important Democratic caucus members. 

If passed by the House, the GENIUS Act would create the first comprehensive federal rules for stablecoins, potentially positioning the U.S. as a leader in the global digital asset economy.