The United States Senate has successfully passed the Genius Act, receiving robust bipartisan backing, which signifies a historic transition towards federal oversight of stablecoins and heralds a new chapter for the cryptocurrency sector.
In a historic decision that signifies a crucial turning point for the cryptocurrency sector, the United States Senate has approved the innovative Genius Act, establishing the first substantial federal framework to regulate stablecoins, a distinct category of cryptocurrency linked to the US dollar.
This significant legislation received robust bipartisan backing, achieving a 68–30 vote, and is set to transform the American digital finance landscape while heightening political and ethical discussions surrounding the rapidly growing crypto industry.
Key Features of the Genius Act
At the core of the Genius Act is a pledge to provide regulatory clarity for stablecoins, which have traditionally functioned within a legal grey area. Republican Senator Bill Hagerty from Tennessee, who sponsored the bill, characterized the legislation as a modernization of the US payment system, referring to stablecoins as a “paradigm-shifting development” that would enable payments to be processed almost instantaneously.
As Hagerty highlighted on the Senate floor, the bill aims to advance the US payment system into the 21st century and reinforce the dollar’s supremacy in the digital space.
According to the new law, stablecoins must be entirely backed by US dollar reserves, undergo monthly audits, and comply with stringent anti-money laundering (AML) regulations. These measures are designed to safeguard consumers and build trust in a sector frequently linked with instability and fraud.
The legislation also requires the US Treasury to formulate clear guidelines for monitoring suspicious activities and enhances bankruptcy protections for bank depositors, as reported by CBS News.
Crucially, the bill authorizes a diverse array of entities—including banks, fintech companies, and even large retailers—to issue their own stablecoins, a development anticipated to significantly broaden the stablecoin market. As reported by The New York Times, forecasts indicate that the US stablecoin market could exceed $2 trillion in the upcoming years if the legislation is enacted.
Political dynamics are evolving in Washington.
The approval of the bill indicates a significant change in Washington’s perspective on digital assets. For many years, the cryptocurrency sector faced skepticism on Capitol Hill. Nevertheless, the progress of the Genius Act demonstrates the substantial growth of the industry’s lobbying strength and financial clout.
As reported by The New York Times, super PACs associated with cryptocurrency invested more than $130 million during the 2024 election cycle, backing 53 out of 58 victorious candidates across various political parties. This campaign played a crucial role in altering the narrative surrounding cryptocurrency, shifting it from a speculative risk to a legitimate element of the financial landscape.
Senator Kirsten Gillibrand, a Democrat from New York who was instrumental in the bill’s development, contended that the lack of regulation on stablecoins had left American consumers at risk and impeded the nation’s competitiveness.
As highlighted by CBS News, Gillibrand advocated for the Genius Act as an essential measure, recognizing that President Donald Trump’s business connections to cryptocurrency were “extremely unhelpful,” yet asserting that these ties should not detract from the bill’s overall value.
Republicans, buoyed by a political trifecta and a White House that is increasingly supportive of digital assets, have promoted the bill as a means to restore the nation’s competitive advantage. A policy statement from the White House, referenced by The New York Times, asserted that the Genius Act would eliminate regulatory ambiguity and enhance the global standing of the US dollar within the cryptocurrency market.
Trump’s connections and Democratic opposition.
Despite the bipartisan success, the bill’s passage through the Senate was far from straightforward. Initially, Democrats withheld their support due to disclosures that an Abu Dhabi-backed company was acquiring $2 billion in stablecoins from World Liberty Financial, a cryptocurrency firm associated with the Trump family. Concerns regarding corruption, transparency, and ethical standards quickly took center stage in the discussion.
As reported by CNN, prominent Democratic figures, including Senator Elizabeth Warren from Massachusetts, criticized the bill for being dangerously underregulated. Warren cautioned that it lacked adequate safeguards and could potentially “supercharge” corruption, especially in light of President Trump’s personal investments in the industry.
Senator Chris Murphy from Connecticut shared these apprehensions, asserting that if Congress exempted the president from ethical oversight concerning cryptocurrency, it would be responsible for facilitating institutionalized corruption.
Democrats advocated for more robust provisions, such as mandatory disclosure of stablecoin holdings by lawmakers and executive officials, a prohibition on public officials profiting from cryptocurrency while in office, and restrictions on large technology companies issuing their own digital currencies.
Nevertheless, Republican leaders, including Senate Majority Leader John Thune from South Dakota, ultimately obstructed these amendments after internal disputes threatened to derail the bill. As noted by The Hill, over 100 amendments were proposed, yet very few made it into the final version.
A narrow path to passage
In early May, the bill’s progress was momentarily halted when a faction of crypto-friendly Democrats retracted their support, protesting the premature conclusion of bipartisan negotiations. This prompted intense behind-the-scenes discussions that ultimately led to a compromise version of the legislation.
One significant addition was the stipulation for members of Congress and the Executive Branch to disclose stablecoin holdings exceeding $5,000. Furthermore, the Treasury was assigned the responsibility of establishing formal regulations to monitor suspicious transactions, addressing some—but not all—of the concerns raised by the Democratic side.
Despite these modifications, prominent Democrats like Senators Warren and Chuck Schumer continued to express their opposition. Warren maintained that the legislation fell short in safeguarding against financial misconduct, comparing it to the deregulatory measures that led to the 2008 financial crisis. In contrast, Schumer recognized that while some enhancements had been introduced, essential anti-corruption measures were still absent.
Republican Senators Rand Paul and Josh Hawley also cast their votes against the bill, though their reasons differed. Paul viewed the regulation as excessively restrictive, cautioning that it would hinder innovation. Hawley opposed certain provisions that he felt granted excessive authority to large tech firms, contending that the bill’s regulatory board could still sanction stablecoin issuance by companies such as Amazon and Alphabet.
A legislative triumph for the cryptocurrency sector
In spite of ongoing disputes and the lack of more robust ethical guidelines, the Genius Act is largely regarded as a major legislative achievement for the cryptocurrency sector. Industry figures like John Wu from Ava Labs commended the bill as foundational, with The New York Times quoting him as stating that it legitimizes stablecoins and incorporates them into the global monetary framework.
The bill’s approval in the Senate has invigorated supporters in the House, where additional discussions and potential amendments are anticipated. As reported by CNN, House Majority Whip Tom Emmer has urged the Financial Services Committee to act swiftly, with the goal of advancing stablecoin legislation by the end of July.
Representative French Hill, who leads the committee, expressed his approval of the Senate vote and pledged to work together on a “functional regulatory framework.”
Although the Genius Act still needs to pass in the Republican-led House and receive the president’s endorsement before it can become law, its success in the Senate marks a vital advancement.
As noted by The Hill, the legislation also generates momentum for other pending cryptocurrency laws, such as the Clarity Act and the Stable Act, which collectively seek to clarify broader regulatory authority and enhance coherence within the digital asset ecosystem.
A significant transformation in cryptocurrency policy
The Senate’s endorsement of the Genius Act has established a foundation for a new chapter in US financial policy, where digital assets are no longer pushed into regulatory obscurity. While concerns regarding conflicts of interest and corruption remain—especially in relation to President Trump’s personal engagement in the cryptocurrency industry—advocates contend that the bill promotes vital consumer protections and ensures American leadership in the rapidly changing digital finance landscape.
As Senator Tim Scott, chair of the Senate Banking Committee, remarked, this accomplishment demonstrates that principled, bipartisan collaboration can produce significant outcomes for the American populace. With the House now poised to contribute, the future of stablecoin regulation—and the wider role of cryptocurrency in the US economy—finds itself at a pivotal juncture.
