The United States Senate passed the “Guiding and Establishing National Innovation for U.S. Stablecoins Act,” also known as the GENIUS Act, on Tuesday with 68 votes in favor and 30 votes against. This signifies a crucial step for the United States in the field of cryptocurrency regulation.
The act aims to establish a federal-level regulatory framework for the stablecoin market exceeding $200 billion, enhancing financial stability and compliance. It mandates that stablecoin issuing institutions must fully collateralize with high-liquidity assets such as US dollars or short-term US bonds, and regularly disclose detailed information about these assets to strengthen transparency and market trust.
Chairman of the House Financial Services Committee, Republican Frank Hill, expressed his commitment to work with colleagues in the House to facilitate the smooth passage of the act. He emphasized the importance of bringing clarity and protection to the digital asset ecosystem.
Republican Senator Lummis from Wyoming, prior to the vote, stated in an interview with a media outlet that there has been no progress in this area over the past four years, and this development marks a turning point that she hopes will not stall at this stage.
Stablecoins are cryptocurrencies pegged to fiat currencies such as the US dollar, with stable prices, widely used for payments, hedging, and trading. Leading stablecoins in the market include Tether (USDT) and Circle’s USDC, with a combined market value of $228 billion.
Supporters believe that the GENIUS Act will not only promote the widespread adoption and innovation of stablecoins but will also attract more users to the digital dollar asset market.
Senator Hagerty from Tennessee pointed out the importance of this regulatory framework in maintaining the global competitiveness of the United States and the dominance of the US dollar. He emphasized that if comprehensive regulations are established, stablecoin issuers could become major holders of US debt in the coming years, further solidifying the US dollar’s position as a global reserve currency.
Scott Bessent, the Treasury Secretary, expressed on the social platform X that if the act is passed, the stablecoin market is expected to expand to $3.7 trillion by the end of the century, driving private sector demand for US bonds, reducing government borrowing costs, assisting in debt control, and attracting global users to participate in the US dollar-dominated digital asset economy, achieving a win-win-win legislative effect for the private sector, the Treasury, and consumers.
However, the act has also raised some concerns. Democratic Senator Elizabeth Warren warned that allowing private platforms to issue stablecoins could create loopholes for sanctions evasion and illicit financial flows, posing potential risks to the financial system. She urged Congress to simultaneously strengthen anti-money laundering, law enforcement, and regulatory mechanisms during the legislative process.
Cryptocurrencies have become an integral part of the current government’s economic policies. After returning to the White House, former President Trump actively incorporated cryptocurrencies into the economic strategy, including establishing strategic Bitcoin reserves, appointing Securities and Exchange Commission (SEC) officials friendly to cryptocurrencies, and relaxing regulations on 401(k) retirement plans investing in crypto assets.
The bill is still pending approval by the House of Representatives before it can be sent to the President for enactment.