In a significant move to address the burgeoning stablecoin sector, the United States Senate has voted to advance the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act). This key procedural vote, held on May 19, saw a 66-32 majority, paving the way for a full Senate debate on the proposed legislation. The bill’s progression comes after an initial blockage by Democratic senators due to concerns over former President Donald Trump’s expansive involvement in cryptocurrency ventures. For more context on the legislative developments, see U.S. Senate Moves Toward Action on Stablecoin Bill.
A Shift in Senate Dynamics
The shift in Senate proceedings was marked by a change in stance from several Democratic senators, including Mark Warner, Adam Schiff, and Ruben Gallego, who initially opposed the motion. Their decision to support the bill’s advancement indicates a growing recognition of the need to regulate the $250 billion stablecoin market, largely dominated by Tether (USDT) and Circle’s USDC.
Senator Cynthia Lummis, a Republican and one of the bill’s primary proponents, expressed optimism about the bill’s passage by May 26, aligning with Memorial Day. “It’s a fair target,” she noted on May 15, underscoring the urgency of establishing regulatory frameworks as the crypto industry continues to evolve at breakneck speed.
Controversy and Concerns
Despite the bill’s forward momentum, it hasn’t been without controversy. Democratic Senator Elizabeth Warren has been vocally critical, arguing that the legislation does little to tackle what she terms Trump’s “blatant crypto corruption.” Warren has consistently highlighted the potential conflicts of interest, pointing to Trump’s recent ventures into memecoins, a crypto platform, a mining company, and notably, a stablecoin named USD1, which has rapidly ascended to the seventh-largest by value.
“Trump and his family have already pocketed hundreds of millions from his crypto ventures,” Warren stated, “and they stand to make hundreds of millions more if this bill passes.”
These allegations have raised eyebrows among lawmakers and the public alike, with some questioning whether the bill’s provisions sufficiently address the former president’s crypto activities. However, Warner, while acknowledging the concerns, emphasized the broader technological implications, stating, “We cannot allow that corruption to blind us to the broader reality: blockchain technology is here to stay.”
The GENIUS Act: A Closer Look
Introduced by Senator Bill Hagerty on February 4, the GENIUS Act aims to bring much-needed regulation to the stablecoin arena. The bill mandates that stablecoins be fully backed, undergo regular security audits, and receive approval from federal or state regulators. Furthermore, it restricts the issuance of stablecoins to licensed entities and imposes limitations on algorithmic stablecoins.
This legislative effort builds on the groundwork laid by former Representative Patrick McHenry’s Clarity for Payment Stablecoins Act, reflecting a concerted push to impose order on a sector that has often operated in a regulatory gray area. The GENIUS Act represents a critical step in aligning the crypto market with traditional financial systems, prompting both anticipation and apprehension from industry stakeholders. For a broader perspective on the upcoming legislative challenges, refer to U.S. Congress Braces for Intense Debate Over Crypto Legislation This Summer.
Looking Ahead
As the bill heads to the Senate floor for debate, the conversation surrounding the future of stablecoins in the United States remains charged with both promise and skepticism. The outcome of this legislative endeavor will likely have far-reaching implications, not only for stablecoin issuers but also for the broader financial landscape.
Will the GENIUS Act usher in a new era of digital currency regulation, or will the concerns raised by its detractors prompt further scrutiny and revision? As the Senate gears up for what promises to be a spirited debate, the stakes are indisputably high. The crypto community and financial regulators alike will be watching closely, ready to navigate whatever comes next in this unfolding saga.
Source
This article is based on: US Senate moves forward with GENIUS stablecoin bill
Further Reading
Deepen your understanding with these related articles:
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- Visa and Baanx Launch USDC Stablecoin Payment Cards
- Ripple Offered $4B-$5B for Stablecoin Issuer Circle: Bloomberg
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.
