In a significant legislative development, David Sacks, the crypto and AI czar under U.S. President Donald Trump, confidently projected that the much-anticipated stablecoin bill is poised to pass the Senate. Speaking to CNBC on May 21, Sacks highlighted the bipartisan support for the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, following a crucial procedural vote where 15 Democrats joined their Republican counterparts to clear the filibuster threshold. This legislative push, aimed at providing a legal framework for dollar-pegged digital assets, could herald a transformative era for stablecoins in the United States. For more on the Senate’s movement towards this legislation, see U.S. Senate Moves Toward Action on Stablecoin Bill.
Stablecoin Market Set for Transformation
The GENIUS Act represents the most advanced federal effort to bring regulatory clarity to stablecoins. Sacks emphasized that the bill could potentially unleash “trillions of dollars” in demand for U.S. Treasurys by fostering stablecoin growth under clear rules. He noted the current landscape, where over $200 billion in stablecoins circulate without comprehensive regulation. By offering legal certainty, the bill is expected to create substantial demand for Treasurys almost overnight, reflecting a significant shift in the financial ecosystem.
However, the bill’s progress isn’t without its share of controversies. Critics have pointed to potential conflicts of interest, given the Trump family’s connection to World Liberty Financial, a crypto firm with familial ties that recently introduced the USD1 stablecoin. This token, backed by U.S. Treasurys and dollar deposits, has already secured a $2 billion investment from Abu Dhabi’s MGX fund via Binance. For more details on this investment, refer to World Liberty’s Stablecoin Will Be Used to Close MGX’s $2B Binance Investment: Eric Trump. Sacks, who divested $200 million in crypto-related assets prior to his White House role, refrained from commenting on whether the president or his family might financially benefit from the bill.
Legislative Hurdles and Industry Impact
Despite the momentum, the GENIUS Act’s final passage remains uncertain. Senator Josh Hawley’s addition of a contentious provision to cap credit card late fees has the potential to alienate key financial industry allies, thereby complicating the bill’s trajectory. This move underscores the complex interplay of legislative priorities and industry pressures that often accompany high-stakes financial regulation.
Meanwhile, the banking industry is reportedly rattled by the burgeoning yield-bearing stablecoin sector. New York University professor Austin Campbell articulated this sentiment in a May 21 online post titled “The Empire Lobbies Back,” where he criticized banks for attempting to stifle competition from these interest-paying digital assets. According to Campbell, banks have long relied on fractional reserve practices to maintain profitability while offering meager returns to depositors. The rise of stablecoins, with their potential for higher yields, threatens to disrupt this model.
Data from a recent Pendle report indicates that yield-bearing stablecoins have surged to $11 billion in circulation since January 2024, capturing 4.5% of the total stablecoin market. This growth trajectory highlights the increasing appeal of these financial instruments, which combine the stability of dollar-pegged assets with the allure of investment returns. In February, the U.S. Securities and Exchange Commission approved the first yield-bearing stablecoin security by Figure Markets, underscoring the sector’s growing legitimacy.
Looking Ahead
The unfolding narrative around the GENIUS Act raises pivotal questions about the future landscape of digital finance. While the bill’s passage could cement the United States as a leader in stablecoin regulation, the potential benefits must be weighed against the controversies and industry challenges. As lawmakers continue to navigate this complex terrain, the implications for traditional financial institutions and the broader crypto ecosystem remain profound and, at times, unpredictable.
In this rapidly evolving sector, the next few weeks could prove critical in shaping the trajectory of stablecoin adoption and regulation, not just in the U.S., but globally. The stakes are high, and the potential for transformative change is palpable.
Source
This article is based on: Trump’s crypto czar David Sacks says stablecoin bill is ‘going to pass’
Further Reading
Deepen your understanding with these related articles:
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- SEC Ditches PayPal’s PYUSD Probe, Removing Key Regulatory Hurdle for Its Stablecoin
- Tether’s U.S.-Focused Stablecoin Could Launch Later This Year, CEO Paolo Ardoino Says
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
