#GENIUSActPass

The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) passed the U.S. Senate on June 17, 2025, with a bipartisan 68-30 vote, marking the first major federal legislation to regulate stablecoins, a type of cryptocurrency pegged to assets like the U.S. dollar. The bill establishes a regulatory framework for payment stablecoins, requiring issuers to be subsidiaries of insured depository institutions or qualified nonbank entities, maintain 1:1 reserves with liquid assets, and comply with anti-money laundering laws under the Bank Secrecy Act. It also prohibits marketing stablecoins as U.S.-backed or FDIC-insured and prioritizes consumer claims in issuer bankruptcies.

Key points:

• Consumer Protections:

Mandates 100% reserve backing, monthly reserve disclosures, and annual audits for large issuers to ensure stability and transparency.

• Regulatory Oversight:

Allows issuers to choose federal or state regulation, with state oversight limited to those issuing $10 billion or less.

• Bipartisan Support:

Backed by 18 Democrats and most Republicans, though opposed by some, like Sen. Elizabeth Warren, over concerns about insufficient safeguards and potential conflicts of interest, particularly with President Trump’s crypto ventures.

• Criticism:

Critics, including Sen. Jeff Merkley, argue it lacks provisions to prevent presidential profiteering and may enable illicit activities due to weak anti-money laundering measures.

• Next Steps:

The bill now heads to the House, where it may face revisions or integration with the House’s STABLE Act, with differences in regulatory authority (Treasury vs. Federal Reserve and others).

The crypto industry, a major political spender in 2024, views this as a landmark victory, potentially growing the stablecoin market to $3.7 trillion by 2030, per Treasury Secretary Scott Bessent. However, debates persist over national security, financial stability, and ethical concerns.