U.S. Senate Passes GENIUS Act to Regulate Stablecoins, Marking Crypto Industry Win
The U.S. Senate overwhelmingly passed the Guiding and Establishing National Innovation for U.S. Stablecoins of 2025 (GENIUS) Act, a significant step forward in U.S. crypto policy. The 68-30 vote, with substantial Democratic support, sends the bill to the House of Representatives. The GENIUS Act aims to regulate stablecoins, dollar-pegged digital tokens issued by companies like Circle, Ripple, and Tether. It mandates stringent reserve requirements, transparency measures, anti-money laundering compliance, and regulatory oversight, potentially including new capital rules for firms offering these assets to U.S. users.
Industry groups like the Crypto Council for Innovation and the DeFi Education Fund hailed the bill as a positive development for the digital asset industry, signifying progress towards appropriate regulation. However, critics, including Senator Elizabeth Warren, express concerns. They argue the bill contains loopholes benefiting foreign tokens like Tether’s USDT, fails to address conflicts of interest related to President Trump’s personal crypto holdings, and could pave the way for tech giants to issue their own stablecoins. Despite this opposition, proponents emphasize that inaction is not an option.
Senator Bill Hagerty, the bill’s sponsor, highlighted that the GENIUS Act will peg stablecoin value to the U.S. dollar, backed by cash and short-term Treasuries, fostering wider adoption. This marks the first significant crypto bill to pass the Senate and the first stablecoin bill to pass either chamber, despite years of prior efforts.
The GENIUS Act’s fate is intertwined with the House’s Digital Asset Market Clarity Act, a broader bill addressing the U.S. crypto market structure. Industry advocates see these bills as interconnected and essential for legal clarity. The Clarity Act has cleared House committees and awaits floor action. Lobbying efforts will now focus on securing House passage of both bills.
A recent TRM Labs report underscores the significance of stablecoins, noting they account for over 60% of crypto transactions, with over 90% pegged to the U.S. dollar, primarily USDC and USDT. While most stablecoin activity is deemed licit, the report highlights their vulnerability to illicit uses such as ransomware payments and fraud, a key concern for Congressional critics.
