- The GENIUS Act establishes the first U.S. regulatory framework focused solely on stablecoins.
- Industry leaders back the bill, but critics warn of potential favoritism toward insiders.
- Trump’s financial ties to crypto raise conflict of interest concerns despite restrictions in the bill.
The U.S. Senate has approved the GENIUS Act, a major milestone in the history of American cryptocurrency laws. The legislation, titled the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, forms the foundation of stablecoin regulation. The bill was approved through bipartisan votes at 68-30 and now moves to the House of Representatives for deliberation.
President Donald Trump, who has endorsed several crypto initiatives in his second term, is expected to support the bill. However, the legislation has drawn both praise and criticism across political and industry lines. While its backers claim it will bring stability to a volatile market, others argue it may tilt the benefits toward industry insiders.
What the GENIUS Act Aims to Do
The GENIUS Act introduces a regulatory foundation for stablecoins — digital tokens tied to traditional assets like the U.S. dollar or gold. It implements compliance requirements on issuers of stablecoins, including reserves segregation, monthly auditing, and minimum reserve requirements. They are designed to reduce the financial risks posed by operations by stablecoins.
Additionally, the bill has anti-money laundering and anti-terrorism provisions. It restricts stablecoin issuance to approved institutions and assigns enforcement responsibilities to the Treasury, Federal Reserve, FDIC, and the Office of the Comptroller of the Currency.
Notably, it prioritizes stablecoin holders during bankruptcy proceedings involving issuers or custodians. By formalizing oversight, the act seeks to restore trust in a segment of crypto that has suffered from past failures.
Industry Support and Political Alignment
The GENIUS Act has received a welcoming reception in the crypto sector because of its association with mainstream legitimacy. The bill has been publicly backed by executives of Coinbase, Gemini, and Ripple. Their support comes after industry spending on the 2024 cycle, where pro-crypto PACS have raised almost $200 million.
On Capitol Hill, Republican lawmakers have shown strong unity in support of the act. Eighteen Senate Democrats also voted in favor, reflecting a rare moment of bipartisan cooperation on digital asset policy. Senator Tim Scott, chair of the Senate Banking Committee, called it a “bold step forward” for market clarity.
Trump, who generated over $57 million in income from a family-backed crypto venture in 2024, praised the bill’s vision. He referred to the act as an example of “American brilliance,” reinforcing his administration’s pivot toward crypto-friendly regulation.
Concerns Over Insider Influence and Gaps in Coverage
Although the GENIUS Act has received general approval, it has been met with some opposition by certain politicians and fiscal analysts. Senator Elizabeth Warren stated that the bill is not sufficient to insure retail investors against losses. She, too, cautioned that it might create a greater divide between the institutional players and the ordinary consumer.
The act bars sitting lawmakers and senior executive officials from issuing stablecoins during their term. However, critics note that it does not address prior investments, such as Trump’s ties to World Liberty Financial. This gap has raised concerns about possible conflicts of interest if the bill becomes law.
Senator Jack Reed voiced similar concerns, urging tighter consumer protections and more robust guardrails. Critics say the act’s current form may consolidate power among established firms while sidelining new entrants.
As the House prepares to vote, scrutiny over these provisions is expected to intensify. The outcome will determine whether the bill becomes the cornerstone of federal crypto regulation — or a point of contention in ongoing digital asset policy.
