Senate Set to Debate GENIUS Act for Stablecoin Regulation

The U.S. Senate is poised to debate and potentially pass the "Guiding and Establishing National Innovation for U.S. Stablecoins" (GENIUS) Act next week, according to supporters of the legislation. This bill aims to establish a regulatory framework for stablecoins, which are typically dollar-based tokens used extensively in crypto trading activities.

Senator Bill Hagerty, a Republican from Tennessee who sponsored the bill, expressed optimism about its prospects. "Next week, the Senate will make history when we debate and pass the GENIUS Act that establishes the first ever pro-growth regulatory framework for payment stablecoins," he stated. The latest draft of the bill includes adjustments to address concerns from Democrats regarding consumer protection and national security. Notably, the bill specifies that large public companies, such as Meta, would not be approved as issuers of these tokens, although private companies like Elon Musk's social media site X would still be eligible.

Senator Kirsten Gillibrand, a Democrat from New York, also supported the legislation, emphasizing the importance of stablecoins in the global economy and the need for robust consumer protections. "Stablecoins are already playing an important role in the global economy, and it is essential that the U.S. enact legislation that protects consumers, while also enabling responsible innovations," Gillibrand said. She noted that the bill has been a bipartisan effort and expressed optimism about its passage in the coming days.

The Senate has faced challenges with the bill in recent weeks, including a failed cloture vote that would have moved it forward into formal debate. The bill is now headed toward a second vote on Monday, requiring 60 votes to advance, which would need to include several Democrats. If it passes this vote, the Senate will have time to continue debating the language and potentially make changes before moving on to a final vote.

Democrats have raised concerns about the potential for abuse and the involvement of corporate giants in stablecoin issuance. Additionally, President Donald Trump's interest in crypto businesses, including World Liberty Financial's stablecoin play, has added complexity to the negotiations. Despite these challenges, the Senate has more crypto-friendly Democrats in this session compared to the previous one, which denied any progress for crypto bills.

The House of Representatives is also working on its own version of the bill, which would need to be reconciled with the Senate's version before being signed into law. Representative French Hill, the Republican chairman of the House Financial Services Committee, acknowledged that Trump's involvement in crypto has added friction to the legislative process.

In summary, the GENIUS Act is on track for debate and potential passage in the Senate next week, with supporters optimistic about its prospects despite recent setbacks. The bill aims to establish a regulatory framework for stablecoins, addressing concerns from Democrats and setting standards for their issuance. The House of Representatives is also working on its own version of the bill, which would need to be reconciled with the Senate's version before becoming law.