Key Takeaways:
Senate lawmakers advance federal guidelines for digital asset issuers.
The bill offers a dual system with federal and state oversight.
Bipartisan support meets with mixed views on oversight details.
New rules may reshape how digital money services operate.
The U.S. Senate Banking Committee has taken a major step in stablecoin regulation, advancing the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act with an 18-6 vote.
The bill, which seeks to establish a federal regulatory framework for stablecoin issuers, now moves to the full Senate for consideration.
A similar version is also pending in the House of Representatives, and both chambers must reconcile their versions before the bill can be sent to the White House.
Stablecoin Bill Faces Next Hurdle After Senate Banking Committee Approval
The GENIUS Act was introduced by Senators Bill Hagerty (R-Tenn.), Kirsten Gillibrand (D-N.Y.), Cynthia Lummis (R-Wyo.), and Angela Alsobrooks (D-Md.).
It defines payment stablecoins as digital assets used for transactions and pegged to a fixed monetary value. The bill sets stablecoin issuers’ licensing procedures, reserve requirements, and regulatory standards.
Firms holding over $10 billion in stablecoins would be federally regulated—by the Federal Reserve for depository institutions and by the Comptroller of the Currency for non-bank issuers.
Issuers below this threshold would fall under state oversight, although larger issuers could apply for a waiver to remain state-regulated.
The bill’s advancement has sparked debate. Senate Banking Committee Chairman Tim Scott (R-S.C.) called the bill a necessary step towards stablecoin regulation— arguing that it provides clear guidelines to protect consumers while fostering financial innovation.
Senator Hagerty described it as a bipartisan effort to promote market competition and stability. However, some Democrats raised concerns about regulatory gaps.
Senator Elizabeth Warren opposed the bill, citing potential national security risk.
During the 2.5-hour hearing, she criticized the lack of additional oversight measures and referenced reports of President Donald Trump’s alleged discussions with a stablecoin firm tied to Binance.
Warren’s proposed amendments, which aimed to add more regulatory controls, were rejected along partisan lines.
Senator Catherine Cortez Masto (D-Nev.) also voiced concerns, arguing that the bill was incomplete and required further debate.
She criticized Republican members for limiting discussions on amendments. In response, Scott defended the committee’s work, stating that extensive efforts had been made to draft a workable bill.
The crypto industry has closely watched legislative developments, hoping for clearer regulatory guidelines.
The previous Democratic-led Senate Banking Committee stalled similar legislation from the House, but with Republicans controlling both chambers, stablecoin regulation is now a legislative priority.
The bill’s progress reflects growing bipartisan interest in setting rules for digital assets, but its final form remains uncertain as further negotiations and potential amendments lie ahead.
GENIUS Act Gains Momentum as Stablecoin Regulation Battle Heats Up
The GENIUS Act is gaining traction as lawmakers push for stablecoin regulations in the U.S. competing with the Clarity for Payment Stablecoins Act and the Lummis-Gillibrand Payment Stablecoin Act.
It proposes a tiered regulatory system where issuers with over $10 billion in market cap, like Tether and Circle, would be federally regulated, while smaller issuers would fall under state oversight.
The bill mandates monthly audited reserve reports, with penalties for false disclosures.
It also aligns with the Trump administration’s pro-crypto stance, giving it bipartisan momentum.
Senate staffers anticipate the bill would progress quickly through Congress.
Looking forward, industry analysts predict stablecoin regulation could reshape digital asset markets.
A February 2025 report noted that stablecoins now account for over 1% of the U.S. M2 money supply.
However, S&P Global warns that institutional adoption will stall without clear rules.
The bill’s fate now hinges on Congressional approval before it reaches President Trump’s desk.
Federal Oversight and the Future of U.S. Crypto
As the GENIUS Act moves closer to reality, the question remains whether its tiered regulatory approach can truly balance innovation and oversight.
Will federal regulation finally provide clarity and security that institutional investors seek, or could it inadvertently leave the U.S. playing catch-up on the global stage?
With the stakes rising for stablecoins—which already represent over 1% of the U.S. money supply—the coming debates in Congress will determine not only the trajectory of digital assets domestically, but also America’s competitive role in the global financial ecosystem.
Frequently Asked Questions (FAQs)
The new regulation could prompt stablecoin issuers to improve internal controls and reserve management, leading to more disciplined market practices while offering consumers clearer insights into digital asset stability.
The bill creates a framework where state regulators oversee smaller issuers while larger ones fall under federal supervision, promoting consistency, transparency, and reliability in digital asset operations.
How will these rules affect crypto innovation and safety? Market participants must examine if uniform guidelines reduce flexibility while securing operations on various digital finance platforms.
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