On June 17, the US Senate passed the GENIUS Act aimed at regulating stablecoins. The bill passed with a vote of 68 to 30 and will now proceed to the House of Representatives.
Provisions of the GENIUS Act
The GENIUS Act includes several provisions concerning stablecoin issuers, anti-money laundering measures, and the requirement for stablecoins to be backed 1:1 by assets like US dollars and short-term Treasury securities. Lawmakers believe this act will bring clarity and stability to the stablecoin industry.
Stability Assurance and Risks for the Financial System
Economic and legal experts have noted concerns that the backing clause of the GENIUS Act could pose a systemic risk to the US monetary system. For instance, Professor Yesha Yadav and Brendan Malone highlighted that the current state of the Treasury market may not support the growth of the stablecoin market. They pointed to the significant growth: "Stablecoins have surged from around $2 billion in 2019 to $230 billion in outstanding claims by the first quarter of 2025."
Next Steps in the Bill's Passage
Following its passage in the Senate, the bill must now go through the House of Representatives, where it faces the challenge of reconciling with the STABLE Act. There are differences in structure and scope between the two bills that require further discussion. Political concerns regarding Donald Trump's activities in the crypto space may also impact the bill's acceptance.
The passage of the GENIUS Act in the US Senate marks a significant step in the regulation of stablecoins; however, its future remains uncertain in the House of Representatives.
