Key Takeaways
- The GENIUS Act created a federal framework for dollar-backed stablecoins, allowing the Department of Treasury and opening the door to banks, Fintechs, and retailers.
- Democrats were unable to pass a provision that would have barred the president from profiting from the new law.
- Many industry giants, including Amazon and Walmart, are reportedly moving toward stablecoin-style offerings as payment networks brace for disruption.
The US Senate has passed the GENIUS stablecoin bill that allows the creation of a regulatory framework for the establishment of US dollar-pegged stablecoins in what has been termed a milestone victory for the cryptocurrency industry.
The bill christened the GENIUS Act, garnered bipartisan support during the Tuesday vote, where several Democrats joined the majority of Republicans to support the proposed federal law. The GENIUS stablecoin bill sailed through 68-30. The Republican-controlled House of Representatives now remains the last hurdle for the bill before it is presented to President Donald Trump’s desk for approval.
A Major Milestone
If signed into law, the GENIUS stablecoin bill would require that tokens be backed by liquid assets such as the US dollar or short-term treasury bills. In contrast, stablecoin issuers would be required to disclose the composition of their reserves publicly every month. Commenting on the development, Andrew Olmem, a managing partner at law firm Mayer Brown and the former deputy director of the National Economic Council during Trump’s first term, stated:
“It is a major milestone […] it establishes, for the first time, a regulatory regime for stablecoins, a rapidly developing financial product and industry.”
Protect Consumers and Enable Responsible Innovation
The passage of the GENIUS stablecoin bill through the Senate is a milestone for the broader cryptocurrency industry, which collectively spent over $250 million supporting the campaigns of the most pro-crypto Congress in US history, as well as President Donald Trump’s sprawling digital asset empire. Sen. Kirsten Gillibrand, one of the sponsors of the bill, said in a statement:
“The GENIUS Act will protect consumers, enable responsible innovation, and safeguard the dominance of the U.S. dollar.”
During the debate, Democrats attempted to amend the bill to prevent the president from profiting from crypto ventures; however, the final legislation only bars members of Congress and their families from doing so. During Trump’s first financial disclosure as US President last Friday, he revealed that he had earned $57 million in 2024 alone from token sales tied to World Liberty Financial, a crypto platform closely aligned with his political brand.
Conclusion
The passing of the GENIUS stablecoin bill in the Senate marks a significant victory for the crypto industry, as well as the Trump administration and GOP leadership, who have made it a priority to get both stablecoin and market structure legislation across the finish line before August. GENIUS now heads to the House, which has its version of a stablecoin bill dubbed STABLE.
Frequently Asked Questions
What are stablecoins?
Stablecoins are a type of cryptocurrency whose value is pegged to another asset, such as a fiat currency or gold, to maintain a stable price.
How are stablecoins different from other cryptocurrencies?
They strive to provide an alternative to the high volatility of popular cryptocurrencies, making them more suitable for everyday transactions.
What is the stablecoin Genius Act?
The Senate’s GENIUS Act would permit stablecoin issuers to maintain reserves in money market funds invested only in US currency, bank deposits, and treasury securities with a maturity of 93 days or less or certain repurchase agreements backed by Treasuries.
