House Passes GENIUS Act Mandating Full Asset Backing for Stablecoins

The U.S. House of Representatives has passed the GENIUS Act, a significant piece of legislation that aims to establish clear and comprehensive rules for stablecoins within the United States. This act mandates that stablecoin issuers must fully back their tokens with assets, effectively banning algorithmic stablecoins. The bill also sidelines the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) from direct oversight of stablecoins, instead placing compliance and transparency at the core of the regulatory framework.

The GENIUS Act was passed with strong bipartisan support, reflecting a growing consensus among lawmakers to embrace blockchain innovation and modernize the payment system. The legislation is designed to strengthen the U.S. dollar's role in the global digital economy by increasing demand for U.S. Treasuries and maintaining the dollar's strength in cross-border markets. Senator Bill Hagerty, the author of the bill, emphasized that the act will help position dollar-backed stablecoins as a competitive alternative to global rivals such as China’s digital currency and European constraints.

The passage of the GENIUS Act marks a significant shift in the regulatory landscape for digital assets. By introducing a structured approach to stablecoin oversight, the bill aims to reduce regulatory friction and provide a clear path for innovators to build within U.S. borders. The 308-122 vote highlighted broad support for a more coordinated approach to digital asset regulation, which has long been hindered by conflicting interpretations from multiple agencies.

Industry leaders have welcomed the GENIUS Act as a long-awaited step toward practical regulatory frameworks. Ripple’s Chief Legal Officer, Stuart Alderoty, described the bill’s progress as a sign that lawmakers are now listening to both innovators and consumers. He noted that clearer guardrails not only benefit the crypto industry but also ensure that the U.S. does not fall behind in the global digital economy. The act now moves to the President’s desk for final approval, with the crypto community eagerly awaiting its implementation.

The focus now turns to the Senate, where the next major proposal, the CLARITY Act, is set to move forward. This act aims to provide additional clarity and structure for the broader crypto industry, fostering innovation while protecting consumers. With the GENIUS Act on the verge of becoming law, the crypto community is hopeful that these regulatory developments will open the door for greater institutional participation and pricing stability in digital assets. The new rules may also attract fintech firms back to the U.S., reducing regulatory uncertainty and creating a more competitive playing field.