Senate Passes GENIUS Act Establishing Federal Stablecoin Rules

The U.S. Senate has passed the GENIUS Act, a landmark bipartisan bill aimed at establishing federal rules for stablecoins. The bill, officially known as the Guiding and Establishing National Innovation for U.S. Stablecoins Act, cleared the Senate with strong bipartisan support in a 68-30 vote on June 17. Eighteen Democrats joined most Republicans in supporting the legislation, while only two Republicans, Sen. Rand Paul of Kentucky and Sen. Josh Hawley of Missouri, voted against it.

The GENIUS Act is the first comprehensive federal framework for the issuance of stablecoins. It mandates that only qualified issuers, such as subsidiaries of insured banks or licensed state entities, can issue payment stablecoins. Smaller issuers may operate under state supervision, but those with more than $10 billion in circulation will be subject to federal regulation. The bill also includes stringent consumer protections, requiring monthly public reserve disclosures, annual audits for issuers with a market capitalization of more than $50 billion, and 100% reserve backing in U.S. dollars or short-term Treasuries. It prohibits issuers from marketing stablecoins as “FDIC-insured” or backed by the U.S. government.

Supporters of the bill argue that it will bring much-needed clarity to the crypto space, strengthen the U.S. dollar’s role in digital finance, and protect consumers. Sen. Bill Hagerty (R-TN), the bill’s sponsor, described the passage as a pivotal moment for U.S. innovation. “This bill will cement U.S. dollar dominance, protect customers, and drive demand for U.S. Treasuries,” Hagerty stated on the Senate floor. The bill faced earlier opposition from some Democrats due to concerns about Donald Trump’s crypto dealings. However, following weeks of negotiations, a revised version of the bill that included stronger national security, ethics, and anti-money laundering protections won over important Democratic caucus members.

The GENIUS Act now heads to the House of Representatives, where House Majority Whip Tom Emmer has urged the Financial Services Committee to advance stablecoin legislation by the end of July. If passed by the House, the GENIUS Act would create the first comprehensive federal rules for stablecoins, potentially positioning the U.S. as a leader in the global digital asset economy. The legislation aims to foster a more stable and trustworthy environment for stablecoins, which are increasingly being used for transactions and as a store of value. By establishing clear guidelines, the GENIUS Act seeks to balance innovation with regulatory oversight, paving the way for faster payments and a more regulated stablecoin framework in the U.S.