After the Senate vote, the GENIUS Act concerning stablecoin regulation in the US has been given an 89% probability of passing.
Overview of the GENIUS Act
The GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins) establishes federal standards for stablecoin issuers, including requirements for full reserve backing, monthly audits, and strict anti-money laundering compliance. The legislation aims to modernize the US financial system by enabling banks, fintech companies, and major retailers to issue their own stablecoins or integrate them into payment networks.
Support and Potential Obstacles
Despite bipartisan support in the Senate, the bill faces uncertainty in the House, where Republicans hold a narrow majority. There is speculation that amendments might be introduced, particularly concerning President Trump’s connections to the crypto sector, such as ties to World Liberty Financial’s stablecoin USD1. Previous attempts to add anti-corruption provisions linked to Trump were rejected in the Senate. President Trump has publicly indicated willingness to sign the GENIUS Act 'with no add-ons' if the House passes it swiftly.
Impact on the Stablecoin Market
The passage of the GENIUS Act is seen as a significant milestone for the cryptocurrency industry, marking a shift toward federal recognition and regulatory clarity for stablecoins. The enactment of this bill could catalyze growth in the US stablecoin market, which is expected to expand substantially in the coming years.
The passage of the GENIUS Act represents an important step in the regulation of stablecoins in the US, potentially leading to their broader adoption and integration into the traditional financial system.
