U.S. Senate Passes GENIUS Act, Setting Stage for Stablecoin Regulation

On June 17, the U.S. Senate voted 68-30 to pass the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, marking a historic milestone as the first comprehensive cryptocurrency regulatory framework to clear a chamber of Congress. Led by Tennessee Republican Senator Bill Hagerty, the bill establishes a regulatory structure for dollar-pegged stablecoins, a $250 billion market critical to digital asset ecosystems. The legislation now heads to the House of Representatives for further deliberation, with a vote expected in the coming weeks.

Bipartisan Support Amid Controversy

The GENIUS Act garnered support from 18 Democrats alongside a majority of Republicans after months of negotiations. However, some Democrats, led by Senator Elizabeth Warren, opposed the bill, citing concerns over consumer protection, national security, and potential economic risks. Warren also criticized the lack of provisions to address conflicts of interest related to former President Donald Trump’s ties to the crypto industry.

The Trump family’s involvement in crypto, particularly through World Liberty Financial’s USD1 stablecoin, has been a contentious issue throughout the legislative process. Despite calls from Democrats to include stricter anti-corruption measures, the final version of the bill passed without amendments addressing these concerns.

Senator Mark Warner, a Democrat who played a key role in negotiations, said, “It’s a long and winding journey. It would have been much easier if the Trump family wasn’t so grossly involved in this emerging sector. But at the end of the day, I’d rather have, [for] this part of our financial system, the innovation come from America and based [on] American laws.”

Restrictions on Big Tech and Bankruptcy Protections

One of the key provisions of the GENIUS Act is its restriction on large non-financial companies, such as Meta and Amazon, from issuing stablecoins unless they partner with regulated financial institutions and meet strict risk management and data privacy standards. This clause aims to curb tech giants’ dominance in the crypto market.

Additionally, the legislation includes bankruptcy protections for stablecoin holders, granting them priority status in bankruptcy proceedings, ensuring their funds are protected ahead of other creditors if an issuer fails.

Next Steps: The House of Representatives

The GENIUS Act now moves to the House of Representatives, which will decide whether to advance the Senate’s bill or pursue its own stablecoin legislation. The House Financial Services Committee had previously introduced the Stablecoin Transparency and Accountability for a Better Ledger Economy Act (STABLE Act), but it has yet to reach a full House vote. The two chambers must reconcile differences, particularly on state versus federal oversight and foreign issuer regulations, before sending a final version to the President’s desk.

President Trump, whose administration has actively supported the GENIUS Act, has expressed his desire to sign stablecoin legislation into law by August. According to a White House statement citied by The Block, senior advisors have recommended the President approve the bill in its current form.

As the U.S. takes a major step toward regulating stablecoins, the global crypto community watches closely to see how this legislation could reshape the industry.