The U.S. Stablecoin Bill, officially known as the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025 (GENIUS Act), is a bipartisan legislative proposal aimed at creating a comprehensive regulatory framework for stablecoins—digital assets pegged to stable real-world assets like the U.S. dollar.

Key Provisions of the GENIUS Act

Reserve Requirements: Stablecoin issuers must maintain reserves on a one-to-one basis, backed by U.S. dollars or other high-quality liquid assets such as Treasury bills.

Licensing and Oversight: Issuers are required to obtain federal or state licenses. State-regulated issuers with assets under $10 billion can operate under state frameworks, provided these are substantially similar to federal standards. Once they exceed this threshold, they must transition to federal oversight within 360 days.

Consumer Protections: The bill mandates segregation of customer assets, prohibits the mingling of customer funds with the firm’s own assets, and requires monthly audited reports to ensure transparency and protect consumers.

Regulatory Clarity: The Act clarifies that payment stablecoins are not to be treated as securities, thereby preventing the Securities and Exchange Commission (SEC) from classifying them as such. This provision aims to provide clear guidelines for financial institutions and the accounting treatment of custodied assets and stablecoins.

Legislative Progress and Political Dynamics

The GENIUS Act was introduced by Senator Bill Hagerty (R-TN) and co-sponsored by Senators Tim Scott (R-SC), Kirsten Gillibrand (D-NY), Cynthia Lummis (R-WY), and Angela Alsobrooks (D-MD). It passed the Senate Banking Committee on March 13, 2025, with an 18-6 vote, indicating strong bipartisan support.

However, the bill has faced recent challenges. A group of nine Senate Democrats, who initially supported the legislation, have withdrawn their backing, citing concerns over inadequate provisions for anti-money laundering, national security, and accountability standards. Additionally, ethical concerns have been raised regarding potential conflicts of interest involving former President Donald Trump's family, who are reportedly involved in a $2 billion stablecoin deal throug

h their company,