Senate Passes GENIUS Act: What Next?

The U.S. Senate passed its Guiding and Establishing National Innovation for U.S. Stablecoins of 2025 Act (GENIUS Act) early this week, marking an important step towards crypto legislation and adoption. Proponents expect that the Genius Act is only the first of its kind, and that overall cryptocurrency legitimacy will see itself bolstered by a federal framework.

And indeed, the lead-up to the final GENIUS Act Senate vote in terms of institutional sentiment has rapidly been evolving. The GENIUS Act is promising for the future of cryptocurrency in the United States and worldwide, although some concerns have yet to be addressed.

In Summary

• The GENIUS Act passes the U.S. Senate, laying the foundation for federal stablecoin regulation.
• Stablecoins are defined as payment instruments which are non-interest-bearing, fiat-redeemable digital assets, excluded from SEC oversight and subject to strict reserve, redemption and custody requirements under the new law.
• Political controversy lingers, with a proposed amendment to bar elected officials—including Trump—from profiting off digital assets was blocked without a vote.
• The market is responding: Circle went public amid surging investor optimism; meanwhile, major players like JP Morgan, Amazon and Walmart are exploring their own stablecoins.

What Is New

A payment stablecoin is defined in the Act as a digital asset used for payment or settlement purposes, with a fixed value redeemable in fiat currency, which offers no interest nor yield to its holder and which is not a security—the Securities and Exchange Commission (SEC) had already excluded non-investment stablecoins from their jurisdiction—, a deposit nor a national currency. As such, it is a regulated payment instrument subject to prudential regulation, reserve requirements, consumer protections, anti-money laundering (AML) and Bank Secrecy Act obligations.

The 134-page GENIUS Act provides guardrails for consumers in the form of guidelines on who can be a payment stablecoin issuer and requirements for full reserve backing, timely redemption rights, monthly public disclosures of reserve composition as well as bankruptcy protections to ensure transparency, stability and user safety as the basis of the regulatory framework.

Stablecoin reserves must be held by qualified custodians under regulatory supervision, and must be segregated from the issuer’s operational funds to prevent misuse. Furthermore, the Act imposes explicit restrictions on foreign stablecoin issuers, prohibiting them from offering payment stablecoins to U.S. persons unless they comply with the Act’s regulatory standards.

Additionally, the GENIUS Act establishes the Office of the Comptroller of the Currency (OCC) as the main federal regulator and supervisor for permitted payment stablecoin issuers, whereas issuers with under $10,000,000,000 worth of stablecoins in circulation can remain under the authority and supervision of their respective state regulators.

On the other hand, true to its name, the Act seeks to encourage and set the groundwork for future innovation regarding stablecoins in the United States. It mandates collaboration to establish standards for permitted payment stablecoin issuers to promote compatibility and interoperability between issuers and the broader digital finance ecosystem.

What Remains

Concerns

While a provision in the Act prevents Congressmen and senior executive officials from issuing a payment stablecoin during their time in office, an amendment proposed by Senator Jeff Merkley which would have barred elected officials, including President Trump, from profiting in any other way off digital assets, was ultimately prevented from being voted on.

Concerns of conflict of interest discussed in our previous blog articles about the months leading up to and the months following Trump’s inauguration remain among many lawmakers and constituents.

Also in the U.S.

In other news, Circle Internet Group (CRCL), the issuer of the popular stablecoin USDC, went public early this month. Its share price soared as public enthusiasm grew, propelled by ongoing stablecoin law-making gaining ground at the Senate since February. It debuted at $30 a share on June 5 and reached $199.59  at market close on June 18. 

JP Morgan, Walmart and Amazon are considering and studying the idea of issuing their own payment stablecoins, with sources from the two retail companies claiming that their interest stems from stablecoins having the potential to save them money on transaction fees, as well as providing faster settlements.

Justin Sun’s Tron Group is also set to go public in the U.S. through a reverse merger with a NASDAQ-listed toy company known as SRM Entertainment. The reverse IPO was brokered by Dominari Holdings, whose advisory board includes Donald Trump Jr. and Eric Trump.

Sun himself has poured almost $18.6 million in the $TRUMP meme coin, earning as a top holder a chance at a private dinner with the President, as well as another $75 million in World Liberty Financial.

What Next?

The House of Representatives still needs to pass their own version of the GENIUS Act—the STABLE bill—and the President must give his approval before stablecoin legislation can come into effect as U.S. law. Meanwhile, institutional interest in stablecoins is undeniable and growing.

Senator Bill Hagerty claims GENIUS is a step forward for the U.S. to become a global leader in crypto. Yet, concerns of corruption are clouding the public image of cryptocurrency as Trump and his family continue to profit from digital assets.