The U.S. Senate has passed the GENIUS Act, a landmark bill that establishes the first federal framework for regulating stablecoins—digital assets tied to the U.S. dollar. With bipartisan support, the legislation aims to boost transparency, enhance security, and bring greater legitimacy to digital finance.
What the GENIUS Act Covers
Short for Guiding and Establishing National Innovation for U.S. Stablecoins, the GENIUS Act outlines strict requirements for stablecoin issuers to protect users and the broader economy. Its key provisions include:
- Full Reserve Requirements: Issuers must maintain liquid reserves, such as U.S. dollars or short-term Treasury securities, equal to the value of stablecoins in circulation.
- Mandatory Reporting: Monthly disclosures on reserve composition are required, along with annual audits for issuers with over $50 billion in liabilities.
- Bankruptcy Protection for Holders: Stablecoin users receive top-priority repayment if an issuer collapses.
- Controlled Issuance: Only approved issuers may offer stablecoins. Foreign entities must meet specific compliance rules.
- Anti-Corruption Measures: Senior officials must report holdings above $5,000. The bill also strengthens anti-money laundering (AML) oversight.
Strong Bipartisan Support, Despite Some Opposition
On June 17, 2025, the Senate voted 68–30 in favor of the GENIUS Act. Support came from both sides of the aisle, with 18 Democrats joining Republicans to push the bill forward. Leading sponsors included Senators Bill Hagerty (R‑TN), Kirsten Gillibrand (D‑NY), Cynthia Lummis (R‑WY), and Tim Scott (R‑SC), who played a major role in advancing the bill out of committee.
Senator Elizabeth Warren voiced concerns, particularly about gaps in the bill’s anti-corruption measures tied to former President Trump’s crypto connections. Still, most lawmakers emphasized the urgency of acting on stablecoin regulation after years of debate.
Next Steps and Industry Reaction
The bill now heads to the House, where lawmakers will choose to either pass the Senate’s version or adopt its counterpart, the STABLE Act. Former President Donald Trump, currently in office, urged the House to approve the legislation swiftly, aiming for a final signing by August 2025.
Meanwhile, the crypto and financial markets are responding positively:
- Circle (USDC) and Tether (USDT) are expected to benefit from the clear regulatory direction.
- Circle’s stock jumped between 27% and 34%, boosting its market cap to roughly $32 billion.
- Coinbase shares also rose 16–17%, fueled by optimism about stablecoin-related revenue.
- U.S. Treasury demand may increase as issuers move toward more short-term government debt holdings.
- Major companies like Meta, Visa, Amazon, Walmart, and Mastercard are exploring stablecoin-powered payments.
