In a landmark 68–30 vote, the U.S. Senate has passed the GUIDING AND ESTABLISHING NATIONAL INNOVATION FOR U.S. STABLECOINS (GENIUS) Act—the first federal legislation ever able to regulate stablecoins. The bill has enjoyed great support across both sides of the political aisle and will now move on to the House, representing a watershed moment in the United States for digital assets.
Introduction: A Watershed Moment
On June 17, 2025, in an unusual moment of congressional bipartisanship, the Senate voted in favor of the GENIUS Act. The legislation will place stablecoins (like USDC and USDT, and other dollar-pegged tokens) under a federal regulatory framework aimed at increasing transparency, consumer protections and possibilities for financial innovation.
Foundations of the GENIUS Act: What It Requires
The law requires all authorized issuers to hold, at minimum, 100% reserves, held in U.S. dollars or short-term Treasury bills, making it possible for every stablecoin to be redeemed at face value. All issuers will also report on what they hold in their reserves each month, and complete an annual audit, with those dealing in over $50 billion in crypto being held to the highest standards. AML functions are implemented throughout the Act to prevent any possibilities of bad actors using these payments platforms to engage in activities such as ransomware, fraud, and other illicit financing. Should an issuer become insolvent, stablecoin holders will have the first legal claims on reserve assets, creating a new class of consumer protection.
Bipartisan Momentum & Senate Sponsors
Senators Bill Hagerty (R–TN), Tim Scott (R–SC), Kirsten Gillibrand (D–NY), and Angela Alsobrooks (D–MD) shepherded the bill through the Banking Committee and onto the Senate floor. Senator Hagerty expressed that the United States is poised to become “a global leader in crypto,” while Senator Scott called the legislation “a bold step forward” for financial innovation.
Support from Crypto and Banking Communities
Industry voices hailed the GENIUS Act as a long-awaited regulatory breakthrough. Andrew Olmem of Mayer Brown described it as “a major milestone” and the first genuine regulatory regime for stablecoins. The Independent Community Bankers of America welcomed the safeguards, noting they will help maintain community bank stability. Circle Internet Group, issuer of USDC, saw its stock surge nearly 16% after the vote, reflecting market optimism. Coinbase similarly saw its shares jump 11%, underscoring growing market confidence.
Critics Raise Ethical and Oversight Concerns
Despite widespread backing, some Democrats criticized the GENIUS Act for regulatory gaps. Senator Elizabeth Warren contended the bill fails to block loopholes benefiting foreign tokens like Tether’s USDT, overlooks potential conflicts linked to President Trump’s personal crypto investments, and could enable Big Tech and major retailers—such as Amazon and Walmart—to issue stablecoins without adequate oversight. She warned the Act might create “a superhighway for Trump corruption,” while other critics noted it doesn’t bar tech giants from launching currencies that could misuse consumer data. On balance, Warren believes doing nothing isn’t safe, but contends that more protections are needed.
House Landscape and the Path Ahead
Now headed to the House, the GENIUS Act may face revisions or a merger with broader legislation like the Digital Asset Market Clarity Act or STABLE Act. Lawmakers argue that stablecoin oversight and wider crypto-market reforms need to advance together. The Conference of State Bank Supervisors continues advocating for stricter oversight—especially over uninsured banks offering money transmission or custody services.
Economic Spillovers and Market Implications
Stablecoins now represent a significant portion of crypto transactions—about 60%—with U.S.-dollar–pegged coins comprising over 90%. The market cap has swelled to a record $252 billion, jumping 22% this year as the Senate vote approached. Analysts predict a shift toward institutional adoption, with stablecoins evolving into pillars of online finance. Treasury Secretary Scott Bessent forecasts this market could reach $2 trillion over the next decade.
Conclusion: A Milestone with Caveats
The Senate’s passage of the GENIUS Act marks a historic advancement for U.S. crypto legislation. It offers transparency, consumer safeguards, and legitimacy for stablecoin issuers. Still, concerns remain over loopholes, oversight gaps, and the potential influence of Big Tech and executive interests. The House vote in the coming months will determine whether this landmark law can lead the U.S. into a new era of crypto regulation—or evolve further to meet these challenges.
