US Senate has passed a bill on stablecoins

What’s new? The US Senate, with significant bipartisan support, passed the landmark Guiding and Establishing National Innovation for US Stablecoin (GENIUS) bill by a vote of 68 to 30, advancing federal efforts to regulate dollar-pegged payment stablecoins.

Material by The Block

What else is known? Republican Senator Bill Hagerty, who sponsored GENIUS, commented on the outcome of the vote this way:

“With this bill the United States is one step closer to becoming the global leader in crypto. The GENIUS Act establishes a pro-growth regulatory framework for payment stablecoins. This bill will cement US dollar dominance, it will protect customers, it will drive demand for US Treasurys.”

Senators took the final vote after weeks of votes within the relevant committees. One such vote failed last month as Democrats refused to support moving the bill forward.

GENIUS requires that stablecoins be fully backed by dollars or similar liquid assets, requires issuers of assets capitalized over $50 billion to conduct annual audits, and establishes rules for foreign issuance.

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Currently, by a wide margin, the world’s most popular stablecoin is USDT from Tether, a company led by Paolo Ardoino and headquartered in El Salvador, with a capitalization of $155,6 billion. It is followed by USDC, created by fintech company Circle together with crypto exchange Coinbase, its capitalization is close to $61,5 billion.

Large publicly traded companies such as Meta and Amazon will be banned from issuing stablecoins unless they meet certain criteria related to financial risk and consumer privacy.

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The bill also regulates the bankruptcy process for issuers, giving stablecoin holders “super-priority” status in repayment proceedings compared to other creditors.

Throughout the process of considering the bill, Democrats have expressed concerns about the provisions on foreign issuers, AML standards, and corporate stablecoin issuance.

Trump’s deepening ties to crypto projects, potentially creating a conflict of interest, have also drawn criticism. The launch of its own USD1 stablecoin by Trump family-affiliated DeFi protocol World Liberty Financial sparked serious debate as GENIUS passed through the Senate.

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In April, the House Financial Services Committee, the lower chamber of Congress, advanced its own stablecoin bill, Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE). However, it has yet to be voted on by the full House.

One possible scenario moving forward for the Senate-approved GENIUS could be that House lawmakers also approve it instead of supporting their own STABLE.

Trump has previously said he wants to sign a bill to regulate stablecoins by August. Last week, Trump’s advisers endorsed GENIUS:

“If [GENIUS] were presented to the President in its current form, his senior advisors would recommend that he sign it into law.”

Since Trump became president earlier this year, his administration has made a concerted effort to encourage lawmakers to draft and pass legislation to provide a legal framework for the crypto sector.