The U.S. Senate has passed the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins), a bill that introduces the first federal rules for stablecoins. The bill passed with a 68-30 vote and now heads to the House of Representatives for further debate.
What is the GENIUS Act?
The GENIUS Act creates a federal framework to oversee the issuance and use of stablecoins—digital tokens that are pegged to the value of the U.S. dollar. These coins are often used in crypto trading and payments because they offer price stability compared to more volatile cryptocurrencies like Bitcoin.
Under the new law, stablecoin issuers will be required to maintain full reserves, undergo monthly audits, and comply with anti-money laundering rules. The bill allows banks, fintech companies, and even major retailers to issue their own stablecoins, as long as they meet regulatory standards.
The Treasury Department will oversee the entire process, giving it sweeping authority over the $238 billion stablecoin market.
Why This Bill Matters
This is the first time the U.S. has introduced federal rules for stablecoins, which are already widely used across crypto markets and traditional finance. Supporters of the bill say it will protect consumers, prevent fraud, and make the U.S. more competitive globally.
Senator Bill Hagerty, who introduced the bill, warned that without such regulation, stablecoin innovation could shift overseas. “We must act now,” he said, “or we risk losing economic leadership in digital finance.”
According to Deutsche Bank, stablecoin transactions reached $28 trillion in 2024—more than the combined volume of Visa and Mastercard. Major platforms like Shopify, Coinbase, and Bank of America are already testing or using stablecoins for real-world payments.
Political Tensions Around the Stablecoin Bill
Despite bipartisan support, the bill was not without controversy. Some Senate Democrats initially pulled their support after it was revealed that a UAE-based fund planned to invest $2 billion in Binance using a stablecoin linked to World Liberty Financial—a crypto firm tied to Donald Trump’s family.
An earlier version of the bill included a clause to prevent presidents and their families from profiting from stablecoins. That clause was later removed. However, lawmakers kept a provision barring members of Congress and their families from doing so.
Senator Jeff Merkley criticized the final bill for leaving out key safeguards. He said it lacks controls to stop elected officials from using crypto ventures for personal gain.
Trump Calls for ‘Lightning Fast’ House Vote Without Amendments
President Donald Trump has urged the House to pass the bill without delay or amendments. He described it as “incredible” and essential for making the U.S. “the undisputed leader in digital assets.”
However, concerns persist. Reports show Trump earned $57 million in token sales last year alone. Critics say the bill could legitimize potential conflicts of interest, especially with his family’s ongoing involvement in stablecoin ventures.
USD1, a stablecoin issued by Trump’s World Liberty Financial, is already the eighth-largest stablecoin by market capitalization.
What’s Next?
The GENIUS Act now heads to the House of Representatives, where lawmakers may attempt to merge it with other crypto-related bills like the STABLE Act or the CLARITY Act. While Senate Republicans want it passed by July 4, House Republicans are exploring whether to attach it to broader crypto legislation to improve its chances.
The House version of the bill differs significantly. It splits oversight among multiple agencies, including the Federal Reserve and the Office of the Comptroller of the Currency, whereas the Senate version centralizes power in the Treasury.
The bill could also impact the broader payments industry. Fintechs, banks, and retailers may start offering stablecoin payments. Some believe this shift will push networks like Visa and Mastercard to support stablecoin transactions, which could reduce payment processing fees.
The GENIUS Act also restricts big tech companies like Amazon or Meta from directly issuing stablecoins unless they partner with regulated financial institutions. This rule aims to prevent tech monopolies from dominating the digital currency space.
