In the ever-changing global cryptocurrency market, every move of the U.S. Senate draws significant attention. On May 20, 2025, news hit like a boulder thrown into a still lake, creating waves — the U.S. Senate successfully advanced the key procedural vote of the (Guiding and Establishing the U.S. Stablecoin National Innovation Act) (referred to as the GENIUS Act) with a vote of 66-32, meaning the bill is about to enter the debate stage in the full Senate, and the regulatory landscape of the cryptocurrency field may undergo significant changes.
A bumpy path of advancement
The advancement of the GENIUS Act has not been smooth sailing. As early as early May, the bill faced strong resistance. Several Democratic senators, deeply concerned about President Trump's vast cryptocurrency business, resolutely withdrew their support for the bill, directly leading to a motion to advance the bill being blocked. Among them, Democratic Senator Elizabeth Warren, a long-time critic of cryptocurrency, became one of the most steadfast opponents of the stablecoin bill. She clearly pointed out that the bill failed to effectively address many issues related to Trump in the cryptocurrency field, expressing her concerns in strong terms.
According to CoinGecko data, Trump and his family have been active in the cryptocurrency field recently, launching various cryptocurrency projects, from meme coins to cryptocurrency trading platforms, from planned listings of cryptocurrency mining companies to the rapidly rising stablecoin USD1, which now ranks seventh in market capitalization. Warren bluntly stated: “Trump and his family have made hundreds of millions of dollars from their cryptocurrency business, and if this bill passes, they will gain even more profits from their stablecoin USD1.” The potential risks of this conflict of interest have undoubtedly become a major reason for some lawmakers to oppose the bill.
However, just a few days later, the situation underwent a dramatic change. In a key procedural vote on May 20, several Democratic lawmakers changed their original voting stance and supported a motion to initiate discussions on restrictions. This change in attitude allowed the GENIUS Act to overcome obstacles and continue moving towards becoming law. As one of the main supporters of the bill, Republican Senator Cynthia Lummis stated as early as May 15 that she believed passing the GENIUS Act before May 26 (Memorial Day in the U.S.) was a 'reasonable goal.' Now, it seems that this goal is gradually becoming clearer and more achievable.
The core significance of the GENIUS Act
The GENIUS Act, proposed by Senator Bill Hagerty on February 4, aims to construct a comprehensive and strict regulatory framework for the nearly $250 billion stablecoin market. Currently, this market is mainly dominated by Tether (USDT) and Circle's USDC, both of which play a crucial role in the market.
The bill imposes a series of stringent requirements on the issuance and operation of stablecoins. First, stablecoins must have complete asset backing, meaning the issuer must ensure that every stablecoin is supported by adequate assets to guarantee its value stability. Second, regular security audits have become a routine obligation for stablecoin issuers, requiring examination by professional, independent audit organizations of their asset status, operational compliance, and other matters, and fully disclosing relevant information to market participants to enhance market confidence. Additionally, obtaining approval from federal or state regulatory agencies is a necessary prerequisite for issuing stablecoins; only entities that have undergone strict reviews and meet a series of regulatory standards are qualified to enter the stablecoin issuance market.
At the same time, the GENIUS Act has clearly restricted the participants in the stablecoin market, stating that only licensed entities can issue stablecoins. This measure aims to exclude those entities that lack the necessary qualifications and may pose potential risks from the market. Additionally, the bill imposes strict restrictions on algorithmic stablecoins, which have always been a focus of regulation due to their complex operating mechanisms and potential risks. The restrictions in this bill will help reduce systemic risks in the market.
Hagerty's stablecoin bill did not come out of nowhere; it was developed and refined based on a discussion draft submitted last October for former Congressman Patrick McHenry's (Payment Stablecoin Transparency Act). The evolution of this bill reflects the ongoing exploration and consideration of U.S. legislators regarding the regulation of the stablecoin market.
Diverse opinions collide: Opportunity or challenge?
Regarding the advancement of the GENIUS Act, opinions are significantly divided. Some lawmakers and industry insiders believe that the passage of this bill will bring unprecedented development opportunities to the stablecoin market. As an important component of the cryptocurrency market, the stablecoin market has rapidly expanded in recent years. Standard Chartered analyst Geoff Kendrick pointed out in a report that if U.S. President Trump signs stablecoin regulatory legislation this summer, by the end of 2028, the size of stablecoin assets (most of which are supported by short-term treasury bills) could grow from the current $230 billion to $2 trillion. Such enormous growth potential will attract a large influx of funds into the stablecoin market, injecting strong momentum into the industry.
From the perspective of market stability, a clear regulatory framework can enhance investor trust in stablecoins. Currently, the stablecoin market is plagued by issues such as lack of transparency, operational risks, and potential legal risks. Strengthening regulation over the issuance and operation of stablecoins can ensure that the reserves behind them are sufficient and transparent, effectively preventing market manipulation and fraud. This will create a fairer, just, and more transparent market environment for the stablecoin market, attracting more traditional financial institutions and investors to participate.
However, there are also many opposing voices. Some individuals represented by Elizabeth Warren believe that the bill cannot effectively address Trump's 'cryptocurrency issues,' which may lead to unfair market competition and potential conflicts of interest. Additionally, some small and medium-sized stablecoin issuers are concerned that the implementation of the bill will significantly increase their compliance costs. To meet the bill's requirements regarding asset backing, security audits, and other aspects, they would need to invest substantial funds and resources in upgrading technology systems, strengthening internal controls, and hiring professional compliance personnel, which undoubtedly adds to the burden for small and medium-sized enterprises already facing fierce market competition.
The global wave of stablecoin regulation
Globally, the regulation of stablecoins is gradually becoming a focus for governments and regulatory agencies. As stablecoins are increasingly used in cross-border payments, decentralized finance (DeFi), and other fields, their potential risks are becoming more apparent. As an important participant in the global financial market, the U.S.'s regulatory attitude and policy direction towards stablecoins will undoubtedly have a profound impact on the global stablecoin market.
The European Union began efforts to develop a rulebook for payment service providers by the end of 2023, which includes relevant regulatory requirements for stablecoins. This framework aims to ensure a consistent user experience across the Eurozone, promote competition, and reduce market fragmentation. Countries and regions such as Singapore and the UAE have also introduced stablecoin regulatory policies to standardize the issuance and trading of stablecoins. These regulatory initiatives from various countries and regions reflect the gradually forming global consensus on stablecoin regulation, which is to establish a sound regulatory framework that promotes innovation and development in the stablecoin industry while effectively preventing financial risks.
In contrast, the U.S. GENIUS Act has its uniqueness. It not only imposes strict requirements on the issuance and operation of stablecoins but also attempts to establish unified regulatory standards at both the federal and state levels to address the long-standing issue of fragmented cryptocurrency regulation in the U.S. If this bill is ultimately passed and successfully implemented, the U.S. is expected to take a leading position in the global stablecoin regulatory field, leading a new trend in global stablecoin regulation.
The future direction of the cryptocurrency market: Is the fog gradually lifting?
As the GENIUS Act steadily progresses towards becoming law, the future direction of the cryptocurrency market seems to be gradually clarifying. In the short term, the stablecoin market may experience some volatility. Some stablecoin projects that do not meet the requirements of the bill may face the risk of being eliminated from the market, while those that can quickly adapt to the new regulatory environment are likely to gain greater development space.
In the long term, the stablecoin market will develop in a more regulated and healthy direction. Compliant stablecoins will play a greater role in cross-border payments, DeFi, and other fields, providing a more solid foundation for the development of the cryptocurrency market. At the same time, the development of the stablecoin market will also have a positive driving effect on the entire cryptocurrency market, attracting more funds and talent into the field and promoting innovation in cryptocurrency technology and the expansion of application scenarios.
However, the future of the cryptocurrency market remains uncertain. Changes in the global economic situation, the pace of technological innovation, and adjustments in regulatory policies can all have a significant impact on the cryptocurrency market. For example, although stablecoins are usually pegged to real reserve assets, their market prices are still influenced by changes in supply and demand, market sentiment, and macroeconomic factors. Some stablecoin projects struggle to maintain their stability during significant market fluctuations. Additionally, the blockchain technology and smart contracts upon which stablecoins rely also face challenges regarding technical security, as code vulnerabilities, hacking attacks, and technical failures can lead to the collapse of stablecoin systems or loss of funds.
The U.S. Senate's advancement of the GENIUS stablecoin bill is undoubtedly an important milestone in the history of cryptocurrency development. It marks a key step for the U.S. in stablecoin regulation and provides an important reference model for global stablecoin oversight. In the days to come, we will continue to monitor the progress of this bill and its far-reaching effects on the cryptocurrency market, witnessing the cryptocurrency market move towards a more mature and stable development path driven by regulation and innovation.