The GENIUS Act, or Guiding and Establishing National Innovation for U.S. Stablecoins Act, passed the U.S. Senate on June 17, 2025, with a bipartisan vote of 68-30. This landmark legislation establishes the first federal regulatory framework for stablecoins, digital currencies pegged to assets like the U.S. dollar, with a market size of approximately $238-250 billion.
Key provisions include:
Consumer Protections: Requires stablecoin issuers to maintain 1:1 reserves with liquid assets like U.S. dollars or Treasury bills, ensuring holders can redeem coins at any time. It also prioritizes stablecoin holders over other creditors in case of issuer bankruptcy.
Regulatory Oversight: Permits issuers to choose federal or state regulation, with state oversight limited to those with issuance under $10 billion. The Department of Treasury holds significant authority, though the House version (STABLE Act) splits oversight among multiple agencies.
Anti-Money Laundering (AML): Subjects issuers to the Bank Secrecy Act for AML compliance, though critics argue it lacks robust safeguards against illicit activities.
Restrictions: Bans non-financial tech giants from issuing stablecoins unless partnered with regulated entities and prohibits yield-bearing stablecoins.
The bill faced resistance, particularly from Democrats like Sen. Elizabeth Warren, who criticized it for potential conflicts of interest, notably President Trump’s involvement in stablecoin ventures like USD1. Despite amendments addressing some concerns, provisions barring the president from profiting were excluded, though Congress members are restricted.
The legislation is seen as a step toward legitimizing stablecoins, potentially boosting their mainstream adoption for faster, cheaper payments and reinforcing the U.S. dollar’s global dominance. Critics, however, warn of risks to financial stability and insufficient protections against fraud or national security threats. The bill now heads to the House, where it may face revisions or be reconciled with the STABLE Act.
