GENIUS Act and stablecoin regulations moved one step closer to law as the U.S. Senate Banking Committee approved the bill with an 18-6 vote. The legislation is designed to bring regulatory clarity to stablecoins while balancing innovation with consumer protection.
Stablecoins, digital assets pegged to traditional currencies like the U.S. dollar, have grown rapidly, with Tether’s USDT holding over $143 billion in reserves. The GENIUS Act aims to establish a clear framework for these assets, assigning federal oversight to issuers over $10 billion and state-level regulation to smaller ones. Key safeguards include transparent reserve reporting and prohibitions on interest-bearing stablecoins, ensuring consumer protections remain robust.
“The bill’s reserve requirements will stabilize markets while fostering innovation,” said Senator Bill Hagerty during committee proceedings. Bipartisan support has been critical, with Senators Cynthia Lummis, Kirsten Gillibrand, Mark Warner, and Sheldon Whitehouse backing the legislation. Opposition from Senator Elizabeth Warren emphasizes national security concerns, highlighting the challenge of balancing innovation with risk mitigation.
The bill now heads to the full Senate, followed by consideration in the House. Its passage could significantly impact U.S. crypto markets, institutional adoption, and the Treasury’s Strategic Bitcoin Reserve plans. The SEC, under acting chair Mark Uyeda, has signaled a shift toward tackling fraud rather than pursuing technical violations, complementing the GENIUS Act’s intent to foster innovation while maintaining oversight.
Industry reactions are already visible. Circle CEO Jeremy Allaire praised the legislation as a framework for “responsible financial innovation,” while major crypto assets like XRP and Solana surged following the news. Stablecoin platforms will need to enhance reserve reporting, comply with anti-money laundering rules, and align with federal oversight structures to meet the new requirements.
Globally, the GENIUS Act positions the U.S. alongside jurisdictions like the EU and Singapore, balancing innovation with stability. If successfully implemented, it could reinforce the U.S. dollar’s dominance in digital finance and accelerate the adoption of blockchain technologies.