The United States Senate has passed a bill to create a regulatory framework for US-dollar-pegged cryptocurrency tokens known as stablecoins, in a watershed moment for the digital asset industry. The bill, dubbed the GENIUS Act, received bipartisan support on Tuesday, with several Democrats joining most Republicans to back the proposed federal rules. It passed 68-30.
The bill would require stablecoin issuers to be backed by liquid assets, such as US dollars and short-term Treasury bills, and to publicly disclose the composition of their reserves on a monthly basis. “It is a major milestone,” said Andrew Olmem, a managing partner at law firm Mayer Brown and the former deputy director of the National Economic Council during Trump’s first term. “It establishes, for the first time, a regulatory regime for stablecoins, a rapidly developing financial product and industry.”
Potential Impact and Concerns
The crypto industry has long pushed for lawmakers to pass legislation creating rules for digital assets, arguing that a clear framework could enable stablecoins to become more widely used. However, some Democrats have expressed concern that the bill would not prevent Big Tech companies from issuing their own private stablecoins and argued that legislation needed stronger anti-money laundering protections and prohibitions on foreign stablecoin issuers.
“It is a bill that turbocharges the stablecoin market, while facilitating the president’s corruption and undermining national security, financial stability and consumer protection is worse than no bill at all,” said Senator Elizabeth Warren, a Democrat, in remarks on the Senate floor in May. The Conference of State Bank Supervisors also called for “critical changes” to mitigate financial stability risks.
Conflict of Interest Concerns
President Donald Trump has sought to broadly overhaul US cryptocurrency policies after courting cash from the industry during his presidential campaign. Trump’s crypto ventures include a meme coin called $TRUMP, launched in January, and a crypto company he partly owns, called World Liberty Financial. Some Democrats have expressed frustration with Trump and his family members promoting their personal crypto projects.
“In advancing these bills, lawmakers forfeited their opportunity to confront Trump’s crypto grift – the largest, most flagrant corruption in presidential history,” said Bartlett Naylor, financial policy advocate for Public Citizen, a consumer rights advocacy group. The White House has said there are no conflicts of interest present for Trump and that his assets are in a trust managed by his children.