Senate Advances Bill to Regulate Stablecoins With 66-32 Vote

The U.S. Senate voted on Monday to advance the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), a bill aimed at regulating stablecoins, following a 66-32 procedural vote. The legislation, introduced by Sen. Bill Hagerty, seeks to establish a federal framework for stablecoin issuers, requiring full asset backing, monthly reserve disclosures, and annual audits for issuers exceeding $50 billion in market capitalization. The bill also restricts algorithmic stablecoins and prohibits large technology firms from issuing stablecoins unless they meet financial risk and consumer privacy criteria.

The vote comes two weeks after Senate Democrats blocked the measure, citing concerns over consumer protections and potential conflicts of interest related to President Donald Trump’s cryptocurrency ventures. Several Democratic senators later changed their stance, allowing the bill to proceed to debate on the Senate floor. The GENIUS Act is expected to face further amendments before a final vote, which could take place as early as the end of the week. If enacted, the bill would mark the first federal regulatory framework for stablecoins, a sector currently valued at nearly $250 billion.

Senator Elizabeth Warren of Massachusetts, the top Democrat on the Senate Banking Committee, remained a vocal opponent of the bill. Warren argued that the legislation puts consumers at risk and enables corruption, urging her colleagues to vote against the updated version. She stated that a weak bill is worse than no bill at all, as it could turbocharge the stablecoin market while facilitating the president's corruption and undermining national security, financial stability, and consumer protection.

Senator Bill Hagerty of Tennessee, who sponsored the legislation, defended the measure, arguing that a lack of regulatory framework results in uncertainty and drives innovative technology offshore. Hagerty urged that the bill has strong bipartisan support and that the question is whether the Senate can get past partisan politics to achieve a victory. The advancement of the GENIUS Act marks a significant step in the regulation of stablecoins, a rapidly growing segment of the cryptocurrency market. The bill's progress highlights the ongoing debate between the need for regulatory oversight and the potential for innovation in the digital asset industry. As the Senate moves closer to final passage, the GENIUS Act is poised to shape the future of stablecoin regulation in the United States.