After months of delays and debates, the U.S. Senate has passed the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, establishing a formal regulatory framework for stablecoins in the country.
The bill is seen as the crypto industryโs most significant legislative achievement to date, potentially opening the door for banks, Wall Street, and tech giants to issue stablecoins and inject large amounts of capital into the market.
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โWith the GENIUS Act, weโre bringing clarity to a sector thatโs been clouded by uncertainty,โ Chairman Tim Scott said.
The bill passed with strong support, garnering 68 votes in favor and 30 against. It now moves to the House of Representatives before it can become law officially.
Once the GENIUS Act passes the U.S. House of Representatives and is signed into law, banks and certain tech companies will be allowed to issue their own stablecoins, provided they meet specific regulatory requirements. This move is expected to integrate digital currencies more deeply into the U.S. financial system.
Stablecoin issuers will be required to maintain adequate reserves and offer stronger bankruptcy protections for bank depositors. The law will also mandate that stablecoins be backed by liquid assets such as U.S. dollars or Treasury bills, and require monthly disclosure of reserve compositions.
Earlier in the year, the bill had strong bipartisan support. However, controversy erupted when it was revealed that the Trump-linked firm World Liberty Finance would be involved in a $2 billion stablecoin deal with an Abu Dhabi-backed company to invest in the Binance crypto exchange.
The revelation triggered concerns over ethics and national security. Democrats demanded tougher safeguards, briefly stalling the bill before returning to support a revised version.
Crypto leaders celebrated the vote as a major win for innovation and regulatory clarity in the U.S. digital asset sector. Ripple CEO Brad Garlinghouse even called it a truly historic moment, comparing its importance to the very first crypto bill ever passed in the Senate.
Why This Matters
With the regulatory clarity provided by the GENIUS Act, stablecoins could become more widely adopted, potentially leading to a significant increase in their market size.
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People Also Ask:
It’s considered the most significant legislative milestone for the crypto industry in the U.S., providing legal clarity and opening the door for banks, tech firms, and Wall Street to issue stablecoins.
If enacted, it will enable instantaneous payments for individuals and businesses, replacing the current system where transactions can take days or even weeks to clear.
Experts say it could increase demand for U.S. Treasuries, lower government borrowing costs, and expand access to dollar-based digital assets globally.
Yes, it focuses specifically on regulating the issuance and trading of stablecoins. Broader crypto regulation is being addressed in separate legislation.
