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The GENIUS Act is a step closer to becoming law in a development that could make stablecoin issuers key players in the American economy.
The GENIUS Act could make stablecoins 'part of the American financial infrastructure.'
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Adoption of stablecoins among banks and financial institutions in the United States may accelerate after new legislation is passed in the Senate.
The U.S. Senate on Tuesday passed the 'National Stablecoin Innovation and Regulation Act,' or the 'GENIUS Act,' by a vote of 68 to 30, according to Cointelegraph. The bill aims to establish clear rules to ensure stablecoins and require them to comply with anti-money laundering laws. It will now be sent to the House of Representatives.
Catalin Tiszauser, head of investment research at the digital asset bank Signum, said that the Senate vote sends 'a strong positive signal to institutions,' bringing the bill one step closer to becoming law.
Tiszauser told Cointelegraph that many major banks and traditional financial institutions plan to integrate stablecoins for payments and settlements, adding:
'Clear regulatory frameworks and compliance pathways are essential, as well as legal recognition of stablecoins as settlement instruments.'
However, it said that the use of institutional stablecoins may initially be limited to tokens issued on private blockchains.
Law, policy, Congress, Senate, stablecoins
Source: U.S. Senate
Alice Li, venture partner and head of U.S. at cryptocurrency venture capital firm Foresight Ventures, told Cointelegraph during the Chain Reaction X Spaces presentation on June 3 that emerging crypto policy developments and regulations for stablecoins are important catalysts for the 2025 crypto market cycle.
'One of the strongest drivers is certainly policy change,' referring to U.S. President Donald Trump's approval of Bitcoin reserves and developments in stablecoin policy as key catalysts for Bitcoin.
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Related: Stablecoin legislation will drive the Bitcoin market cycle in 2025: Redefining finance
The GENIUS Act makes stablecoin issuers 'key players'
Andrei Grashev, managing partner at Falcon Finance and DWF Labs, stated that full congressional approval of the GENIUS Act would make stablecoins 'part of the American financial infrastructure.'
Grashev said, 'If issuers start holding large amounts of Treasury bonds, it will change their role from specialized instruments to key players in the economy.'
He added that Treasury-backed stablecoins would provide institutions with more confidence in using them for settlements and payments.
Related: Jack Ma's Ant International looks to acquire stablecoin licenses in Singapore and Hong Kong
Alex Buelo, co-founder of Rayls, a banking blockchain working with JP Morgan's Kinexys blockchain infrastructure solution, said that financial institutions using stablecoins 'operate in a regulatory gray area, taking few concrete steps due to a lack of clarity and government guidance.'
'Now that this is done, institutions will not hesitate to take advantage of the opportunities presented by stablecoins, especially when it comes to cross-border payments, 24/7 settlements, and enhancing global on-chain liquidity,' Buelo told Cointelegraph.
On June 15, banking giant JPMorgan Chase filed a new application for a new U.S. trademark for 'JPMD,' fueling speculation about the launch of a stablecoin.
The list included services such as digital asset trading, remittances, exchanges, clearing, and payment processing.
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