Senate passes with 68 votes (GENIUS Act)
The US Senate on Tuesday (6/17) passed the (Guidance and Establishing the National Innovation for US Stablecoins Act) (GENIUS Act, also known as (GENIUS Act)) with an overwhelming vote of 68 to 30. This is the first significant cryptocurrency-related bill passed by the US Congress. The bill was led by Republican Senator Bill Hagerty from Tennessee and received bipartisan support, including the defection of 18 Democratic senators.
(GENIUS Act) requires all payment stablecoins to be fully backed 1:1 by US dollars or short-term US Treasury bonds, and issuers with market capitalizations over $50 billion must undergo annual audits and establish a clear regulatory framework from federal or state governments. The bill also amends existing securities laws to clarify that compliant stablecoins are not classified as securities, thus excluding them from SEC jurisdiction.
Senator Hagerty stated before the vote: "Through this bill, America is one step closer to becoming a global leader in cryptocurrency." He emphasized that the bill will "consolidate the dominance of the US dollar, protect customers, and increase demand for US Treasury bonds."
Treasury Secretary Scott Bessent also expressed support on X, predicting that the stablecoin market could grow to $3.7 trillion by the end of the 2030s.
Source: X Treasury Secretary (Scott Bessent) predicts that the stablecoin market could grow to $3.7 trillion by the end of the 2030s.
Notably, Republican Senators Josh Hawley and Rand Paul voted against the bill, aligning with progressive Democratic senators like Elizabeth Warren, primarily concerned that the bill allows large tech companies to issue stablecoins and track consumer spending data under certain conditions.
Strict regulatory framework established, large enterprises face entry restrictions
(GENIUS Act) establishes the first comprehensive regulatory framework for stablecoins in US history, requiring issuers to keep reserves in accounts separate from operational funds and prohibiting the payment of yields to holders. Entities with liabilities exceeding $10 billion must obtain a federal license, while smaller-scale issuers can operate under state regulatory systems that meet federal standards.
The bill specifically imposes restrictions on large publicly traded companies, prohibiting tech giants like Meta and Amazon from issuing stablecoins unless they meet specific standards for financial risk and consumer data privacy. This regulation stems from concerns among Democratic lawmakers about corporate abuse of stablecoins to track user behavior.
In terms of bankruptcy protection, the bill grants stablecoin holders "super-priority status," ensuring they can reclaim funds first in the event of issuer bankruptcy, while also protecting existing bank depositors from claims on the issuer's reserves. The Treasury will be authorized to issue quarterly audit templates, and the Commodity Futures Trading Commission (CFTC) will also receive limited enforcement authority over the spot market.
In addition, the bill requires issuers to maintain compliance programs with the Bank Secrecy Act, conduct customer due diligence checks, and report suspicious activities. A report from TRM Labs indicates that stablecoins currently account for over 60% of cryptocurrency trading volume, with more than 90% pegged to the US dollar. Although 99% of stablecoin activities are for legitimate purposes, their speed, scale, and liquidity also make them tools for ransomware, fraud, and terrorism financing.
Trump family's conflict of interest controversy, some compromises from Democrats
The process of passing the bill was not smooth. Last month, a procedural vote in the Senate failed, primarily due to Democratic senators expressing strong dissatisfaction with President Trump and his family's conflicts of interest in the cryptocurrency industry. The Trump family's World Liberty Financial platform issued its own stablecoin, $USD1, in March, which has now become the eighth-largest stablecoin by market capitalization.
To garner Democratic support, the bill was amended after its failure to include provisions related to conflicts of interest, but it still allows the President, Vice President, and their families to engage in stablecoin-related business during their term.
Bartlett Naylor from the consumer advocacy organization Public Citizen criticized: "Congress members have missed the opportunity to combat Trump's cryptocurrency profiteering, which is the largest and most blatant act of corruption in presidential history."
Despite facing criticism, Democratic senators like Kirsten Gillibrand ultimately chose to support the bill, believing that "doing nothing is not an option." Ji Kim, CEO of the Cryptocurrency Committee, called this a "historic advancement for the digital asset industry," while Amanda Tuminelli, Executive Director of the DeFi Education Fund, stated that this is a "milestone progress for the appropriate regulation of digital assets in the US."
House vote is critical, and the market awaits the bill's enactment
(GENIUS Act) has now been submitted to the House for review, but the timeline for passage remains uncertain. The House Financial Services Committee passed its own stablecoin bill, the "Stablecoin Transparency and Accountability Promoting Better Ledger Economy Act" (STABLE Act), in April but has yet to hold a full House vote. The House may choose to directly review the (GENIUS Act) or combine it with a broader (Digital Asset Market Clarity Act) (CLARITY Act).
The White House has urged Congress to pass the (GENIUS Act) and (CLARITY Act) before the July recess. Trump's AI and cryptocurrency czar David Sacks stated: "The US Senate passed the (GENIUS Act): this landmark stablecoin legislation provides regulatory clarity, enhances consumer protection, and expands the US dollar's dominant position online."
The market is optimistic about the bill's prospects, with stablecoin issuer Circle's stock price reaching an all-time high of $164.7. JPMorgan has applied for the "JPMD" trademark, suggesting a possible issuance of its own stablecoin, while retail giants like Walmart and Amazon are also considering similar plans. Analysts expect that once the bill is enacted, the "floodgates" will open for Wall Street and the US banking industry, potentially bringing trillions of dollars into the cryptocurrency market.
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'The Genius Act passes the Senate! GENIUS focuses on US dollar dominance and consumer protection, awaiting House review.' This article was first published in 'Crypto City'.
