How the US stablecoin bill could affect the crypto market. What is the GENIUS Act and how is it being reacted to in the market?
On May 19, US senators voted in favor (66 to 32) of the GENIUS Act, which regulates the issuance of stablecoins based on the US dollar. The bill is expected to undergo several more votes on amendments before it is finally adopted. Citing experts, The Block described this event as a “historic” moment for cryptocurrencies, capable of ensuring the dominance of the US dollar.
This bill “will bring the US payment system into the 21st century,” said Republican Senator Bill Hagerty, who led the bill's development.
“Customers will be protected, demand for US Treasury bonds will grow to over $1 trillion, and innovation in digital assets will flourish in the US in the future,” Hagerty added.
The bill also found a high level of support from the crypto industry. According to the advocacy group Stand With Crypto, crypto users sent senators more than 60,000 emails urging them to support the initiative in the hours leading up to the vote.
“This is a historic victory on the path to passing stablecoin legislation,” said Coinbase Director Faryar Shirzad, adding that there is still a lot of work ahead.
The importance of GENIUS Act
The GENIUS Act could become the first law regulating the cryptocurrency market under the new administration of US President Donald Trump. Despite numerous crypto-friendly initiatives from the US government, such as the executive order “On Strengthening U.S. Leadership in Digital Finance” and the creation of a government bitcoin reserve, no cryptocurrency laws have been passed since Trump took office.
The GENIUS Act is imperfect, but “much better than the current state of affairs,” said Senator Mark Warner, a Democrat from Virginia, before the vote, adding, according to DLNews: “It sets high standards for issuers, limits large technological excesses, and creates a safer, more transparent framework for digital assets.”
After the final adoption of GENIUS, analysts expect a multiple increase in the capitalization of stablecoins. The British bank Standard Chartered believes that the figure could reach $2 trillion by the end of 2028, compared to nearly $244 billion on May 20, 2025 (data from Defillama).
The importance of passing the law was also noted by Matt Hogan, chief investment officer at Bitwise. He pointed out that delaying the adoption of even one law on cryptocurrencies could jeopardize the entire momentum of the crypto market.
Experts and market participants are hoping for at least some regulatory clarity regarding crypto assets. “The bill provides much-needed regulatory clarity for both issuers and consumers,” said Gabe Feinberg, chief legal counsel at Sui Foundation.
Criticism of this bill
Dollar-backed stablecoins are currently virtually unregulated in the US, as noted by Galaxy Research. However, GENIUS outlines specific rules for issuing stable tokens, including requirements for issuers and reserve requirements. It also includes provisions for bankruptcy protection, anti-money laundering compliance rules, marketing restrictions, and rules for international companies.
Nevertheless, some officials criticize the GENIUS bill, saying it will encourage corruption and crime. As noted by prominent cryptocurrency critic Senator Elizabeth Warren, a bill that significantly strengthens oversight of the stablecoin market should be passed. But, she said, a law that disrupts the stablecoin market, encourages presidential corruption, and undermines national security, financial stability, and consumer protection is worse than no law at all.
The bill also partially addresses the issue of stablecoins being introduced by tech giants, which is a concern for some experts. According to Mark Hayes, representing the non-profit organization Americans for Financial Reform, the document has serious security issues that would allow public companies such as X and TikTok to issue their own stablecoins.
Hayes noted that rushing to pass such documents will only do harm: “Pushing this through on an arbitrary timeline because the crypto industry is breathing down your neck is not the best way to make policy.”