The U.S. Senate has passed the GENIUS Act, marking the creation of the first federal framework for stablecoin regulation. The vote was 68 in favor and 30 against.
A Historic Framework for Stablecoins
The GENIUS Act introduces long-awaited clarity in stablecoin regulation by placing oversight in the hands of the U.S. Department of the Treasury. Until now, stablecoin issuers operated under a patchwork of inconsistent state-level rules. The new law establishes national standards, requiring stablecoins to be backed 1:1 by U.S. dollars or similarly secure assets while mandating regular audits and adherence to anti-money laundering protocols.
Treasury Takes the Reins
A major differentiator between the GENIUS Act and the earlier STABLE Act is regulatory control. While the STABLE Act proposed shared oversight among various agencies, the GENIUS Act gives the Treasury near-total authority. This positions Treasury Secretary Scott Bessent, a known stablecoin advocate, at the helm of what could become a multitrillion-dollar market.
Controversy Surrounds Crypto and Politics
Despite bipartisan support, the GENIUS Act faced friction. Democratic lawmakers raised concerns about growing financial entanglements between politics and crypto, specifically pointing to former President Donald Trump's substantial holdings and income in the space. The final bill restricts crypto profits for members of Congress, but not for all elected officials.
With the Senate's approval secured, the GENIUS Act now heads to the House, where negotiations and revisions are likely. This law signals that stablecoins are rapidly gaining institutional legitimacy and that regulation is finally catching up to innovation.
