Stablecoin Regulation Advances as the U.S. Senate voted 66-32 on May 19, 2025, to move the GENIUS Act to full floor debate, a pivotal step toward establishing a federal framework for payment stablecoins. This bipartisan breakthrough, following a failed vote two weeks prior, signals progress in shaping the crypto market’s future. This article explores the GENIUS Act’s provisions, political shifts, and implications for digital assets.
A Historic Step for Stablecoin Oversight
Stablecoin Regulation Advances with the GENIUS Act, introduced by Senator Bill Hagerty and co-sponsored by Tim Scott, Kirsten Gillibrand, Cynthia Lummis, and Angela Alsobrooks. The bill creates the first federal framework for payment stablecoins, requiring:
- 100% backing by USD or equivalent liquid assets.
- Annual audits for issuers with over $50 billion in market cap.
- A ban on foreign stablecoin issuance in the U.S., though secondary market trading is permitted.
- Treasury authority to act against non-compliant foreign issuers.
Hagerty celebrated the vote on X, calling it a “historic opportunity” to protect consumers, maintain U.S. innovation leadership, and strengthen the USD dominance globally. The bill’s passage to full Senate debate marks a foundational step in regulating digital assets.
Democrats Shift Support After Amendments
Stablecoin Regulation Advances despite initial Democratic opposition on May 8, when all Senate Democrats voted against the bill, citing:
- Insufficient oversight of foreign issuers.
- Weak anti-money laundering (AML) standards.
- Conflicts of interest tied to former President Donald Trump’s crypto ventures.
- Risks from Big Tech issuing stablecoins.
Discover: GENIUS Stablecoin Bill Faces Setback: Senate Vote Fails
Within two weeks, bipartisan negotiations led to amendments addressing these concerns, securing Democratic support. Key changes include:
- Conflict-of-interest rules for senior federal officials, excluding the president and vice president.
- Restrictions on Big Tech issuing stablecoins if they mishandle sensitive financial data.
- Enhanced national security and consumer protection provisions.
These revisions swayed Democrats like Ruben Gallego, Mark Warner, and Kirsten Gillibrand, who previously opposed the bill, helping it surpass the 60-vote cloture threshold. Senator Lummis aims to finalize the GENIUS Act by May 26, advancing crypto market clarity.
Ongoing Controversies and Next Steps
Stablecoin Regulation Advances, but tensions persist, particularly over exemptions for the president and vice president. Senator Elizabeth Warren criticized the bill, arguing it fails to address Trump’s ties to World Liberty Financial’s USD1 stablecoin, which she claims amplifies his financial influence. Warren warned the bill could “enable corruption” by expanding the stablecoin market without sufficient safeguards.
Despite these concerns, the bill’s bipartisan momentum suggests a strong chance of Senate passage. After Senate approval, the GENIUS Act will move to the House, where a companion bill, the STABLE Act, is under discussion. If passed, President Trump could sign it into law, cementing USD dominance in digital assets.
Conclusion
Stablecoin Regulation Advances with the GENIUS Act’s Senate progress, establishing a robust framework for payment stablecoins. Bipartisan amendments addressed Democratic concerns, paving the way for potential enactment. While debates over Trump’s crypto ties linger, the bill strengthens USD dominance and positions the U.S. as a leader in the crypto market.
