Senate Advances GENIUS Act for Stablecoin Regulation
2min read The U.S. Senate is advancing towards a vote on the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, a significant piece of legislation aimed at regulating stablecoins. This move marks the first time the Senate has considered a major crypto bill. Senate Majority Leader John Thune initiated the process to expedite the bill, aiming to limit delays and expedite its passage. The Senate Banking Committee had previously approved the bill with a wide bipartisan majority of 18-6, and the House Financial Services Committee also advanced a similar bill in April.
Senator Bill hagerty, the Tennessee Republican who authored the bill, expressed his enthusiasm for the legislation, stating, "I look forward to passing the GENIUS Act in short order to keep digital asset innovation in America, protect customers, and make sure foreign companies are playing by the same rules." The bill is also supported by Senator tim Scott, the chairman of the Senate Banking Committee. The GENIUS Act mandates that issuers maintain one-to-one reserves and comply with stringent anti-money laundering laws, aiming to establish a comprehensive federal framework for stablecoin issuers.
However, the bill has faced criticism for potentially creating an uneven playing field. It exempts foreign stablecoin issuers, such as Tether, from U.S. oversight for at least two years. This exemption has raised concerns about consumer protection and market fairness, as it could undermine the bill's objectives and place U.S.-based issuers at a disadvantage. In response, the bill's sponsors have emphasized the importance of maintaining innovation within the U.S. financial system. Senator Tim Scott stated that the legislation aims to "keep innovation and opportunity on American soil rather than driving it overseas."
The outcome of the GENIUS Act could significantly influence the future of stablecoin regulation in the United States. The bill aims to balance the need for oversight with the desire to foster innovation in the digital asset space. As the Senate prepares for the upcoming vote, the interplay between legislative and regulatory bodies will be crucial in shaping the future landscape of stablecoin regulation.
Amidst these legislative developments, the U.S. Securities and Exchange Commission (SEC) has been actively refining its approach to stablecoin regulation. In April 2025, the SEC clarified that certain stablecoins, particularly those that are fully-reserved and dollar-backed, do not qualify as securities. This decision aligns with the SEC's broader efforts to distinguish between different types of digital assets and apply appropriate regulatory frameworks. The SEC emphasized that while these stablecoins are not classified as securities, issuers must still adhere to anti-money laundering (AML) and know-your-customer (KYC) regulations.
In a notable development, the SEC concluded its investigation into PayPal's PYUSD stablecoin without taking enforcement action. The inquiry, initiated in November 2023, was closed in February 2025, reflecting a shift towards a more accommodating regulatory environment under the current administration. This move is part of a broader trend where the SEC has been scaling back enforcement actions against major cryptocurrency firms, signaling a potential easing of regulatory pressures on the industry.
These regulatory shifts have significant implications for the GENIUS Act. While the bill seeks to establish a federal framework for stablecoin issuers, the SEC's evolving stance may influence the bill's provisions and its alignment with existing regulatory guidelines. The interplay between legislative and regulatory bodies will be crucial in shaping the future landscape of stablecoin regulation in the United States. 
