Senate Advances GENIUS Act for Blockchain Regulation

On May 21, US lawmakers made significant strides in advancing two key legislative efforts related to blockchain technology. The Senate approved a motion to proceed with the Government and Enterprise Need for Innovation in the United States Act, or GENIUS Act, paving the way for formal debate and amendment processes. This move followed a successful cloture vote on May 19, which demonstrated strong bipartisan support for the underlying bill with a vote of 66–32.

The GENIUS Act aims to establish standards for stablecoin issuance, requiring issuers to maintain high-quality liquid reserves, typically US Treasuries or insured deposits, fully backed 1:1 against outstanding liabilities. The act also prohibits the offering of yield-bearing products and mandates compliance with know-your-customer (KYC) procedures, suspicious activity monitoring, and anti-money laundering (AML) programs. Depending on the scale of issuance, issuers must operate under the supervision of federal authorities or federally certified state regulators. The approval for debate includes an amendment process, allowing for extensive discussion and the ability to limit it. This open-ended debate process enables senators to propose and review amendments before any final vote.

While the Senate continues its deliberations on the GENIUS Act, lawmakers in the House reintroduced a separate measure to enhance regulatory clarity for developers. Congressmen Tom Emmer and Ritchie Torres filed the Blockchain Regulatory Certainty Act, which seeks to codify protections for software developers and blockchain service providers who do not custody customer assets. The bill proposes a federal safe harbor that would prevent developers and node operators from being treated as money transmitters, financial institutions, or other regulated intermediaries solely by producing or maintaining blockchain software.

The Blockchain Regulatory Certainty Act defines a “blockchain developer” as any entity creating or maintaining software for decentralized networks and specifies “control” as the legal authority to unilaterally access and transact with digital assets without a third party. The measure also states that developers or service providers cannot be subject to state or federal licensing obligations unless they control users’ digital assets. Additionally, it clarifies that the bill does not preempt intellectual property law or prevent states from enforcing compatible regulatory frameworks. Although the House has not scheduled a markup or floor vote for the Blockchain Regulatory Certainty Act, its introduction signals renewed momentum on the House side to differentiate custodial and non-custodial actors in digital asset ecosystems.

These legislative efforts underscore the growing recognition of the importance of blockchain technology and the need for clear regulatory frameworks to support its development and adoption. The GENIUS Act and the Blockchain Regulatory Certainty Act represent significant steps toward establishing standards and protections that can foster innovation while ensuring compliance with regulatory requirements. As the legislative process continues, stakeholders in the blockchain and digital asset communities will be closely watching for further developments and potential amendments to these bills.