In a landmark move, the US Senate has advanced the GENIUS Act, a bill aimed at creating a federal regulatory framework for stablecoins — a class of cryptocurrencies pegged to traditional assets like the US dollar. The measure passed a procedural vote 66–32 on Monday, overcoming weeks of political gridlock and signaling a major shift in approach to digital assets.
What is GENIUS Act?
If passed into law, the GENIUS Act would establish the first comprehensive federal rules for stablecoin issuance, transparency, and reserve requirements. The bill mandates that issuers maintain a 1-to-1 reserve of liquid assets, such as cash, to back their tokens. In the event of bankruptcy, stablecoin holders would be prioritised over other creditors. Issuers would also be subject to anti-money laundering (AML) regulations. The legislation allows both banks and nonbank entities to issue stablecoins — the latter provided they register and meet federal standards.
Democratic concerns and Trump ties
The bill had initially stalled in the Senate after Democrats raised concerns about alleged ties between the bill and the Trump family’s crypto-related business ventures. Reports linking World Liberty Financial, a Trump-affiliated firm, to billions in investment from Abu Dhabi triggered fears of potential financial misconduct and regulatory capture. Senator Elizabeth Warren led opposition voices, warning that the bill could facilitate corruption and undermine consumer protections. She argued that without stronger safeguards, the act could open the door for public officials to profit from the very market they are meant to regulate. Despite the backlash, weeks of negotiations brought key Democrats back to the table. Senator Mark Warner of Virginia played a central role in reviving the bill, calling it a “meaningful step forward” despite its flaws. Senate Majority Whip John Thune, a Republican, emphasised the bill’s bipartisan drafting process and urged action to prevent innovation from moving overseas. “The GENIUS Act isn’t perfect, but it provides essential guardrails for a fast-growing sector that could otherwise threaten our financial stability,” Warner said.
Not all lawmakers were convinced. Senator Warren maintained her opposition, saying the bill lacks sufficient oversight to prevent abuse. On the right, Senators Rand Paul and Josh Hawley also opposed the legislation — Paul citing concerns about federal overreach, and Hawley criticising the lack of restrictions on Big Tech’s role in stablecoin issuance. Despite these objections, the bill’s advancement marks a significant milestone for the crypto industry, with global implications for how digital assets are regulated.
What’s Next for the GENIUS Act?
With the procedural hurdle cleared, the bill now heads toward a final Senate vote. If passed, it will represent the most significant US legislation on digital assets to date. Industry leaders, investors, and international regulators are closely watching the outcome, which could shape the global future of crypto governance. Supporters see the GENIUS Act as a critical move to position the US as a leader in blockchain innovation, while opponents continue to push for stricter safeguards before the bill becomes law.
