The U.S. Senate has passed the "Guiding and Establishing National Innovation for U.S. Stablecoins Act" (GENIUS Act) with a bipartisan vote of 68 to 30, marking a significant legislative milestone for the cryptocurrency sector. This bill establishes the first-ever federal regulatory framework for payment stablecoins and their issuers, aiming to provide clarity and oversight to this rapidly growing segment of the digital asset market.
Key provisions of the GENIUS Act include:
Limiting issuance of payment stablecoins in the U.S. to "permitted payment stablecoin issuers" (PPSIs), which can be regulated at the federal or state level depending on the issuer and issuance volume.
Allowing qualifying foreign stablecoin issuers to operate in the U.S. if they meet comparable regulatory requirements and come under the supervision of the Office of the Comptroller of the Currency (OCC).
Mandating that stablecoins be fully backed by liquid assets such as U.S. dollars and short-term Treasury securities, with issuers required to publicly disclose their reserve compositions monthly.
Imposing compliance requirements including anti-money laundering (AML) rules.
The legislation is viewed as a major step toward integrating stablecoins into the mainstream financial system by providing regulatory certainty, which could enable broader adoption and innovation. Treasury Secretary Scott Bessent thinks that the U.S. stablecoin market could expand nearly eightfold to over $2 trillion in the coming years with such a framework in place.
However, some critics, including Senator Elizabeth Warren, have voiced concerns that the bill does not sufficiently address risks such as corruption and systemic vulnerabilities, noting the absence of provisions to prevent potential abuses by politically connected individuals.
The GENIUS Act now moves to the House of Representatives, where a companion bill, the "Stablecoin Transparency and Accountability for a Better Ledger Economy Act of 2025" (STABLE Act), is under consideration. The final legislation will require reconciliation between the House and Senate versions before it can be signed into law by the President.
So, the Senate's passage of the GENIUS Act represents a landmark regulatory effort to mitigate systemic risks associated with stablecoins by establishing federal oversight, reserve backing requirements, and transparency measures, while balancing innovation and industry growth.
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