A Regulatory Milestone for Stablecoins
The US Senate deflected a filibuster and advanced the Guiding and Establishing National Innovation for US Stablecoins Act, 2025 (GENIUS Act) by a 66-32 vote. The landmark move signals a shift in policymakers’ approach towards digital assets like cryptocurrencies.
The GENIUS Act stablecoin regulation seeks to roll out guidelines on the issuance and management of stablecoins.
The vote was conducted on May 20, weeks after the Senate had blocked the bill from passing the same cloture vote, citing concerns over US President Donald Trump's recent crypto investments.
The bill, which is touted as a one-of-a-kind framework for stablecoins, will now proceed towards full floor consideration.
The move was welcomed by crypto industry experts and other stakeholders. DWF Labs' managing partner Andrei Grachev hailed the move and said the bill would help in establishing a “unified digital financial system" which was efficient and programmable.
In a statement, Blockchain Association's Policy Head Sarah Milby said the passing of the bill reinforces the US's "leadership in digital assets."
Understanding Stablecoins
Stablecoins are a kind of crypto asset whose value is linked to another financial security like the US Dollar. The key advantage of stablecoins is that they balance the innovation and speed of blockchain transactions with the stability of fiat currencies and traditional financial instruments.
Earlier in May, the collective market cap of Dollar-pegged stablecoins USDC and USDT crossed $151 billion. The milestone marks an uptick of about 9% from USDC and USDT's price levels in December and January, as per reports.
According to market experts, the surge signals the strengthening of investors’ confidence and could lead them to aggressively explore the broader crypto sector. Many countries across the globe are working on stablecoin regulation.
GENIUS Act Stablecoin Regulation: Key Features
According to the legislation, a stablecoin is a digital asset used for payments and can be redeemed at a fixed rate of exchange. As per the bill, stablecoin issuers will be required to hold a minimum of $1 for every time stablecoins worth $1 are issued.
It was tabled on February 4 by Senators Angela Alsobrooks (D-MD), Kirsten Gillibrand (D-NY), Cynthia Lummis (R-WY), Bill Hagerty (R-TN), along with Chairman Tim Scott (R-SC).
Other key provisions of the bill mandate that in case the issuing authority files for bankruptcy, it should prioritize repayment to stablecoin holders.
The GENIUS Act stablecoin regulation also determines which entities are permitted to roll out stablecoins. As per the bill, the issuing authority would be subject to US' anti-corruption and money laundering laws like the Bank Secrecy Act, and the Financial Crimes Enforcement Network.
What Are Critics Saying About The Bill
The bill has received its fair share of criticism, especially from Democrats like Senator Elizabeth Warren (D-Massachusetts). Speaking on the Senate floor on May 19, Warren claimed that the bill, if passed, can accelerate "Trump's corruption by supercharging the size of the stablecoin market".
Her comments come in the wake of the launch of USD1, a stablecoin rolled out by World Liberty Financial, a crypto company backed by the Trump family. In May, Abu Dhabi-based investment firm MGX used USDI for its $2-billion investment in crypto exchange Binance.
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Other critics have pointed out that the GENIUS Act stablecoin regulation doesn't do enough for offshore stablecoin issuers.
In an interview, Bitget Exchange CEO Vugar Usi Zade said that even though offshore stablecoin issuers like Tether play “an outsized role in global liquidity”, the bill doesn't have much for them.
He also expressed fears that stablecoin issuers from the US may have to face higher costs as the legislation speeds up consolidation across the broader crypto market.
