U.S. Moves Closer To Stablecoin Regulation As Senate Passes GENIUS Act

On June 17, 2025, the U.S. Senate passed the GENIUS Act, the country’s first federal legislation specifically aimed at regulating stablecoins. Formally known as Guiding and Establishing National Innovation for U.S. Stablecoins, the GENIUS Act outlines a detailed regulatory structure for the issuance, backing, and disclosure requirements of dollar-pegged stablecoins in the United States. While the bill must still clear the House of Representatives and receive the President’s signature, its Senate approval marks a significant turning point, not just for crypto regulation in the U.S., but also for how digital assets may integrate with traditional finance in the years ahead.

A Landmark Victory for Crypto

Reportedly, close to $250 million was funneled into the 2024 election cycle by the crypto industry to help usher in what is now believed to be the most crypto-friendly Congress in U.S. history. Market experts believe that the investment appears to be paying off. Passed by a 68–30 margin, the GENIUS Act is being hailed as a landmark win, not only for the wider crypto industry, but also for President Donald Trump’s growing footprint in the digital asset space. Senator Kirsten Gillibrand (D-NY), one of the bill’s key sponsors, stated that the legislation will “protect consumers, enable responsible innovation, and safeguard the dominance of the U.S. dollar,” underscoring the bill’s intended balance between innovation and oversight. 

What is the GENIUS Act?

The GENIUS Act marks the United States’ first comprehensive federal framework designed specifically to regulate stablecoins. Passed by the Senate with strong bipartisan support, the bill sets out a series of rules aimed at ensuring transparency, consumer protection, and financial stability in the rapidly growing stablecoin market.

The act mandates that all U.S. dollar–pegged stablecoins be fully backed on a 1:1 basis by highly liquid assets, including cash or short-term U.S. Treasury instruments. Issuers will be required to publish monthly disclosures of their reserves, ensuring accountability and building trust with users. The bill also includes strict provisions for security measures, signaling a clear intent to prevent the misuse of stablecoins for illicit activities. 

Importantly, the GENIUS Act outlines who can issue stablecoins, limiting issuance to entities that meet specific regulatory standards, while barring current lawmakers and executive officials from launching stablecoin projects. By establishing these guardrails, the bill aims to protect consumers, support responsible innovation, and maintain the U.S. dollar’s dominance in an increasingly digital global economy.

Conclusion

The GENIUS Act arrives at a time when confidence in the stablecoin market is not just growing, it’s accelerating, both in scale and strategic importance. U.S. Treasury Secretary Scott Bessent recently expressed confidence in the growth of dollar-backed stablecoins, projecting their market capitalization could surpass $2 trillion in the near future. Supporting this view, a 2024 report by brokerage firm Bernstein estimated that the stablecoin market could expand to $2.8 trillion over the next five years. These estimates highlight a future where stablecoins may serve as core infrastructure for global payments, remittances, and on-chain finance. With the GENIUS Act laying down a regulatory path, the U.S. is aligning its approach to digital assets, anchoring stablecoin development to the established credibility of the U.S. dollar.

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