The U.S. Senate passed the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins of 2025) on June 17 in a decisive 68-30 vote, marking the first time the Senate has approved comprehensive digital asset legislation and delivering the cryptocurrency industry its most significant regulatory victory to date, advancing the stablecoin market evolution.
The bipartisan support saw 18 Democrats joining most Republicans, with only Senators Rand Paul (R-KY) and Josh Hawley (R-MO) dissenting from the GOP side. The landmark legislation now advances to the House of Representatives, where lawmakers must reconcile it with their own stablecoin bill before the August recess – approximately 50 days away.
Comprehensive Federal Framework Takes Shape
The GENIUS Act establishes rigorous standards for stablecoin issuers while opening the market to a broader range of participants. Key provisions include:
- Full reserve backing requirements with liquid assets such as U.S. dollars and short-term Treasury bills
- Monthly public audits of reserve compositions to ensure transparency
- Anti-money laundering compliance measures to prevent illicit use
- Expanded issuer eligibility allowing banks, fintechs, and major retailers to launch stablecoins
- Big Tech restrictions preventing non-financial technology giants from direct issuance without partnering with regulated entities
The legislation also includes a notable provision prohibiting members of Congress and senior executive branch officials from issuing stablecoins during their public service – a measure addressing potential conflicts of interest.
Treasury Projects $2 Trillion Market Growth
Treasury Secretary Scott Bessent emphasized the administration's urgency, telling a Senate appropriations subcommittee that the U.S. stablecoin market could expand nearly eightfold to over $2 trillion in the coming years, competing directly with central bank digital currencies. The White House has prioritized passing stablecoin legislation before the August congressional recess.
"This framework positions the United States to lead the global digital currency revolution while maintaining financial stability," noted industry observers, highlighting how the legislation balances innovation with consumer protection.
Opposition Voices Concerns Over Enforcement
Senator Elizabeth Warren (D-MA) led Democratic opposition, arguing "this weak bill is worse than no bill at all." Critics raised concerns about:
- Potential exploitation by criminals and terrorist organizations
- Conflicts of interest related to Trump-backed World Liberty Financial's USD1 stablecoin
- Whether enforcement mechanisms are robust enough to prevent market manipulation
Despite opposition, the bill's passage reflects growing congressional recognition that stablecoins have become critical financial infrastructure, with transaction volumes now surpassing traditional payment networks like Visa and Mastercard.
House Reconciliation Presents Next Challenge
The Senate's GENIUS Act must now be reconciled with the House's STABLE Act, which differs primarily in regulatory oversight structure. While the Senate version centralizes authority under the Treasury Department, the House bill distributes oversight among the Federal Reserve, Office of the Comptroller of the Currency, and other agencies.
Key reconciliation points include:
- Unified vs. distributed regulatory framework
- State vs. federal oversight responsibilities
- Specific reserve composition requirements
- Enforcement mechanisms and penalties
Market Impact and Industry Response
Stablecoin issuers and cryptocurrency exchanges welcomed the Senate vote as validation of the sector's maturation, accelerating real-world asset tokenization. Circle, issuer of USDC, saw its valuation discussions accelerate, while Tether reported record demand for USDT across emerging markets.
The legislation's passage coincides with data showing stablecoins have become the "default settlement layer for the internet," processing over $8.5 trillion in annual transaction volume, supporting the growing DeFi ecosystem. In Bolivia alone, virtual asset transactions surged 530% year-over-year to $294 million in the first half of 2025.
As the House prepares its response, the cryptocurrency industry faces a critical window to shape America's digital asset regulatory framework. With institutional adoption accelerating and global competition intensifying, the GENIUS Act represents a pivotal moment in legitimizing and standardizing the $160 billion stablecoin market.