The US Senate has passed the bipartisan GENIUS Act, a bill that aims to establish federal rules for stablecoins, in a 68-30 vote on June 17, CNN reported.
The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act 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 bill, which has been in the works for several weeks, aims to bring much-needed regulatory clarity to the stablecoin market. Stablecoins are cryptocurrencies pegged to a reserve asset, such as the US dollar, to maintain a stable value. Their growing use in payments and as a bridge between traditional finance and the cryptocurrency market has raised concerns among regulators about consumer protection, financial stability, and money laundering risks.
The GENIUS Act would create a comprehensive federal framework for stablecoin issuance. It would require stablecoin issuers to be either a subsidiary of an insured depository institution or a state-licensed entity. Smaller issuers would be subject to state supervision, while those with more than $10 billion in circulation would be subject to federal regulation.
The bill also includes strict consumer protection measures. It requires monthly public disclosures of reserve holdings and annual audits for issuers with a market capitalization of more than $50 billion. Stablecoins would need to be fully backed by US dollars or short-term US Treasuries, and issuers would be prohibited from marketing stablecoins as “FDIC-insured” or backed by the US government.
Supporters of the bill, including Republican Senator Bill Hagerty of Tennessee, who sponsored the legislation, argue that it will strengthen the US dollar’s role in digital finance, protect consumers, and drive innovation. Hagerty said on the Senate floor that the bill “will cement US dollar dominance, protect customers, and drive demand for US Treasuries.”
The bill faced initial opposition from some Democrats, who were concerned about former President Donald Trump’s connections to the cryptocurrency industry. Trump’s family has a stake in World Liberty Financial, which issued a stablecoin in March. However, after weeks of negotiations, a revised version of the bill that included enhanced national security, ethics, and anti-money laundering provisions won over key Democratic members.
If passed by the House and signed into law, the GENIUS Act would be the first comprehensive federal legislation on stablecoins, positioning the US as a leader in the global digital asset economy. The bill’s passage in the Senate is a significant step forward in the regulatory process, but its journey through the House could face further scrutiny and potential amendments.
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