Senate passes stablecoin bill, turning focus to House

With significant bipartisan support, the U.S. Senate passed the landmark GENIUS Act on Tuesday, advancing federal efforts to regulate stablecoins and putting pressure on the House to chart the next phase of the nation’s efforts to regulate digital assets.

This is the first time the Senate has passed significant crypto legislation. Republican Senator Bill Hagerty, sponsor of the GENIUS Act, thanked some of his fellow senators for their support ahead of the official vote. Many expected the bill to pass after less than a week ago lawmakers overwhelmingly voted to advance the legislation.

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

Senators held the final vote after weeks of committee votes, negotiations, and procedural votes, with one vote having failed last month after Democrats refused to support advancing the legislation. Since Donald Trump became president earlier this year, his administration has made a concerted effort to encourage lawmakers to craft and pass legislation that provides a legal framework that could enable cryptocurrency to thrive in the U.S.

Senate lawmakers voted 68 to 30 to pass the Guiding and Establishing National Innovation for U.S. Stablecoins, or GENIUS bill for short.

“A year ago I would’ve thought this at best was a fever dream. Think for a moment on how far we’ve come,” Coinbase’s Chief Legal Officer Paul Grewal said earlier Tuesday with the expectation GENIUS would pass with bipartisan support.

The bill requires stablecoins to be fully backed by U.S. dollars or similarly liquid assets, mandates annual audits for issuers with a market capitalization of more than $50 billion, and establishes guidelines for foreign issuance.

Currently, by a large margin, the world’s most popular stablecoin is El Salvador-based Tether’s USDT stablecoin. USDT’s supply is over $150 billion, according to The Block Data Dashboard.

Tech giants Meta and Amazon restricted

Large, publicly traded firms, such as Meta and Amazon, will be prohibited from issuing stablecoins unless they meet specific criteria related to financial risk and consumer data privacy. The legislation includes language regarding bankruptcy, granting stablecoin holders “super-priority status in bankruptcy proceedings, giving them the legal right to recover their money first in the unlikely event of an insolvency and protects existing bank depositors from reserve claims from an issuer,” according to a fact sheet.

Lobbyists for traditional financial firms, including Bank of America, at one point pushed lawmakers to restrict nonbanks from issuing stablecoins.

Throughout the process, Democrats expressed concerns over provisions related to foreign issuers, anti-money laundering standards, and potential corporate issuance of stablecoins. President Donald Trump’s deepening ties to crypto ventures and the potential of arising conflicts of interest have drawn criticism. The launch of Trump-affiliated World Liberty Financial’s own stablecoin triggered considerable debate as the GENIUS bill moved through the Senate.

On to the House

Next, the House will need to decide how it wants to move. In April, the House Financial Services Committee advanced its own stablecoin legislation, the Stablecoin Transparency and Accountability for a Better Ledger Economy Act, out of its committee. However, it has not yet been brought to a full House vote.

House lawmakers could decide to take up the GENIUS Act instead of supporting their own stablecoin legislation, according to Jennifer Schulp, director of financial regulation studies at the libertarian think tank Cato Institute.

There has also been discussion of combining stablecoin legislation with a broader crypto market structure bill, though that is seen as a more challenging lift. Trump has said he wants to have a stablecoin bill on his desk by August. Last week, Trump’s advisors threw their support behind the GENIUS bill in a statement of administration policy.

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

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