The U.S. Senate has passed the GENIUS Act, the first federal regulatory framework ever for dollar-pegged stablecoins, a momentous occasion for the world of cryptocurrency and quite possibly one that will reframe the future of digital finance in the United States. The bipartisan legislation, passed 68-30, heads to the House of Representatives, where President Trump is urging its signature before the recess in August.
Key Highlights
First Federal Crypto Legislation: The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) is the very first U.S. law to specifically regulate cryptocurrencies, targeting payment stablecoins that are 1:1 collateralized with cash or short-dated Treasuries.
Transparent Issuance Rule: Stablecoins can be issued only by regulated and licensed institutions—federally insured bank subsidiaries, federal-chartered nonbanks, or state-regulated entities—to U.S. citizens.
Stringent Reserve and Audit Requirements: Issuers must maintain 100% liquid reserves, submit monthly reports, and comply with anti-money laundering regulations. Large issuers (> $50 billion) must be audited annually.
Consumer Protections: In the event of bankruptcy, stablecoin holders enjoy priority claims over reserves, giving consumers superior protection.
Restrictions on Big Tech: Public corporations outside finance must obtain approval from senior regulators to issue stablecoins, with strict data-use regulations to safeguard privacy.
US Dollar Dominance Boost: Through the facilitation of dollar-backed stablecoins, the Act can reinforce the US dollar's status as the world's digital reserve currency, countering de-dollarization.
Industry and Political Support: The cryptocurrency industry spent lavishly in lobbying for this bill, demonstrating its importance. The Act is in line with President Trump's pro-crypto policy, indicating a more welcoming regulatory climate.
Next Steps: The Act must be reconciled with the STABLE Act in the House to be enacted into law, but both bills share a common vision for regulating stablecoins.
Why It Matters The GENIUS Act will give legal certainty, consumer confidence, and institutional acceptance to stablecoins already representing a significant fraction of crypto transaction volume and already being utilized increasingly by major businesses like Meta, Walmart, Visa, and Mastercard. The legislation, if enacted, would not only protect consumers and constructively encourage innovation but also entrench the dominance of the US dollar in the digital economy.
Source: CNBC, Built In, Forbes, PYMNTS, Banking Dive, Business Insider, Cointelegraph, Reuters, TRM Labs, 21Shares, Fenwick & West LLP.
