GENIUS stands for 'Guiding and Establishing National Innovation for U.S. Stablecoins Act'. It is the first federal law specifically designed to regulate stablecoins in the United States .
Approved by the Senate on June 17, 2025, with a vote of 68-30, it now moves to the House of Representatives .
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✅ What does it regulate and for what?
1. Backing in liquid reserves (1:1): stablecoins like USDC or USDT will have to be backed by safe assets such as Treasury bonds and undergo periodic audits.
2. Clear regulatory oversight: a specific legal framework is established for the issuance and circulation of these currencies, putting them in a similar situation to banks or money market funds.
3. Issuing bank allowed: paves the way for banks to design and issue their own stablecoin, something that was previously in a gray area .
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🎯 Expected impact
• Legal clarity for major players: Tether and Circle, with over 200 billion USD in stablecoins, benefit .
• Institutional acceleration: major banks like JPMorgan, Bank of America, or Citi are already exploring integrating stablecoins; this law gives them support to do so more securely.
• Consolidation of the digital dollar: could strengthen the role of the dollar in the global crypto economy .
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⚠️ Criticisms and controversies
• Exceptions for Trump: the project prevents members of Congress and their families from issuing stablecoins, but does not prohibit the president or his family from doing so. This generated criticism from figures like Elizabeth Warren .
• Lack of broader guardrails: many Democrats claim that there were not enough mechanisms to prevent potential conflicts of interest .
• Risk of concentrating liquidity outside traditional banks, which could weaken deposits in mid-sized banks and generate risks for the financial system.
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🛣️ Next steps
• Now the law goes to the House of Representatives. There is a debate about adding a complement called the CLARITY Act, which would define the regulatory treatment for tokens beyond stablecoins and limit the power of the SEC .
• If approved in the House and signed by Trump, it could go into effect before August 2025.
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💥 Why is it a bombshell for the crypto community?
• Brings stability and institutional legitimacy for stablecoins, pushing their use in global payments and in FinTech.
• Large players (banks, funds, tech companies) could launch their own legal currencies.
• marks a before and after: it is the first crypto law from Congress in the U.S.
