US Senate Passes GENIUS Act Regulating Stablecoins 51-23

The US Senate has approved the landmark GENIUS Act, a significant piece of legislation aimed at regulating stablecoins. The bill, officially known as the Guiding and Establishing National Innovation for US Stablecoins Act, was passed with a 51-23 vote on June 17 and will now move to the House for further consideration. This vote followed a 68-30 cloture decision on June 11, which cut off debate and initiated the mandatory 30-hour countdown to the final roll call.

Senator Bill Hagerty (R-Tenn.), the lead sponsor of the bill, hailed the vote as "a big win for the United States." In a statement, he emphasized that the GENIUS Act establishes the first-ever pro-growth regulatory framework for payment stablecoins. Hagerty highlighted that the bill aims to cement US-dollar dominance, protect customers, increase demand for US Treasuries, and ensure that innovation in the digital asset space remains within the United States rather than falling into the hands of adversaries.

Hagerty further explained that pegging stablecoins one-for-one to cash or short-term Treasuries combines the dollar’s stability with blockchain speed, enabling near-instant settlement for businesses and individuals. This, he projected, would usher in a new generation of payment processing. He also noted that stablecoin issuers could become the world’s largest holders of Treasuries by 2030, bolstering fiscal resilience.

The GENIUS Act mandates that every payment stablecoin must hold reserves equal to the number of tokens in circulation, limited to short-dated US Treasuries or insured deposits, and bars issuers from paying yield. Reserves must be kept in accounts segregated from operating capital, and issuers must maintain compliance with the Bank Secrecy Act, perform customer due diligence checks, and report suspicious activity. Entities with more than $10 billion in liabilities would need a federal charter, while smaller issuers could operate under state regimes that meet federal standards, subject to joint examinations by federal regulators.

Additionally, the Treasury Department will be required to publish quarterly audit templates, and the Commodity Futures Trading Commission (CFTC) will be given limited enforcement powers in the spot market. Treasury Secretary has argued that the reserve mandate could draw private demand toward Treasury bills, reduce borrowing costs, and introduce millions of users worldwide to dollar-denominated digital asset rails.

With the Senate's approval, the GENIUS Act now awaits scheduling in the House. The passage of this bill marks a significant step towards establishing a comprehensive regulatory framework for stablecoins, which are increasingly becoming a crucial component of the digital asset ecosystem. The bill's provisions aim to ensure the stability and security of stablecoins, protect consumers, and foster innovation within the digital asset space. The outcome of the House's consideration of the GENIUS Act will be closely watched by industry stakeholders and regulators alike.