The U.S. Senate made a landmark decision on June 17
The U.S. Senate made a landmark decision on June 17, approving the first comprehensive federal bill for the cryptocurrency sector. The GENIUS Act, accepted by a vote of 51 to 23, marks a significant step towards regulating stablecoins. This bill establishes a growth-oriented framework specifically targeting stablecoins used for payment purposes. Now, the GENIUS Act will move on to the House of Representatives, which had already passed a different stablecoin bill through committee.
Core Elements of the GENIUS Act
The recent Senate vote on the GENIUS Act followed weeks of committee discussions, negotiations, and procedural votes. Last month, a progress vote failed due to a lack of support from Democrats. Republican Senator Bill Hagerty spearheaded the legislation named “Guiding and Establishing National Innovation for U.S. Stablecoins.”
The GENIUS Act sets clear rules for stablecoin issuers, requiring them to fully back their cryptocurrencies with U.S. dollars or equivalent liquid assets. Furthermore, issuers of stablecoins with market values exceeding $50 billion must undergo annual audits. The act also lays down guidelines for foreign issuers and grants crypto holders “super-priority creditor” status in the event of issuer bankruptcy.
Limitations, Debates, and Future Steps
Under the GENIUS Act, public companies like Meta and Amazon face restrictions on issuing stablecoins. This is permissible only if they meet specific financial risk and consumer data privacy standards, reflecting traditional financial institutions’ lobbying to limit non-bank entities. Democrats remain concerned about foreign issuers complying with anti-money laundering standards and corporate formation requirements.
Controversies have arisen over President Donald Trump’s deepening ties with cryptocurrency initiatives, raising potential conflicts of interest. The involvement of Trump’s affiliated World Liberty Financial in launching its own stablecoin coincided with the Senate’s debate on the bill, yet the GENIUS Act successfully passed the Senate. It now awaits consideration by the House of Representatives.
In April, the House had cleared its stablecoin bill through committee but has not yet conducted a full vote. Experts suggest that the House might adopt the GENIUS Act or merge stablecoin rules with a broader market structure bill. Notably, the Trump administration backs the GENIUS Act, with Trump’s desire to see the bill on his desk by August.