The US Senate has voted 68-30 to advance the GENIUS Act, a bipartisan bill aimed at regulating stablecoins, with a final vote possible as soon as Monday. Formally known as the Guiding and Establishing National Innovation for U.S. Stablecoins Act, the bill mandates that all stablecoins must be fully backed by US dollars or equivalent liquid assets and requires annual audits for issuers whose market capitalisation exceeds US$50 billion (approximately AU$76.84 billion).
Led by Senator Tim Scott, the initiative signifies a cross-party effort to bring stability and transparency to the cryptocurrency landscape. Senate Majority Leader John Thune endorsed the bill, highlighting its potential to integrate cryptocurrency into the mainstream financial system. Notably, the Trump administration has signalled support for the legislation, with senior advisers indicating that Donald Trump would likely approve the bill if it remains unchanged.
However, the bill has faced criticism from several Democratic lawmakers, including Senate Majority Leader Chuck Schumer and Senator Elizabeth Warren, who voiced their concerns during the voting process. Warren specifically highlighted potential loopholes and raised alarms about consumer protections, linking the bill’s provisions to Trump’s previous associations with crypto ventures, such as World Liberty Financial and ties to a popular memecoin.
Warren has described the GENIUS Act as flawed, citing concerns that it lacks robust consumer safeguards as well as sufficient measures to protect national security and financial integrity. She stated, “The GENIUS Act is riddled with loopholes and contains weak safeguards for consumers, national security, and financial stability.”
Despite bipartisan support, the GENIUS Act may face challenges in the House of Representatives, which is currently reviewing a separate piece of legislation aimed at regulating stablecoins—namely, the Stablecoin Transparency and Accountability for a Better Ledger Economy Act. This alternative bill has made it through committee but has not yet been brought up for a vote, with differing approaches to regulatory oversight and treatment of international issuers like Tether contributing to the divide.
The ongoing debate surrounding the GENIUS Act underscores the complexities of the cryptocurrency regulatory landscape and the ongoing contention between regulatory bodies and industry stakeholders. Critics argue that the bill’s shortcomings could exacerbate issues surrounding consumer protection and open avenues for corruption tied to political connections within the crypto sector.
As the legislative process unfolds, the fate of the GENIUS Act remains uncertain, with various stakeholders closely monitoring developments in both the Senate and the House. The outcomes could have far-reaching implications for the future of stablecoins and cryptocurrency regulation in the United States.
