U.S. Senate Advances GENIUS Act: A Milestone for Stablecoin Regulation
A Key Step Toward Federal Oversight
The U.S. Senate Banking Committee has voted 18-6 in favor of advancing the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, a landmark bill aimed at regulating stablecoin issuers and establishing federal oversight in the digital currency space.
Now heading to the full Senate for consideration, the GENIUS Act seeks to introduce clear compliance measures for stablecoin providers, requiring one-to-one reserve backing and adherence to anti-money laundering (AML) laws. A similar bill is under review in the House of Representatives, and both versions must be aligned before they can be signed into law by President Donald Trump.
What the GENIUS Act Means for Stablecoins
Senate Banking Committee Chairman Tim Scott called the bill a “significant step forward for innovation”, noting that it aims to:
✅ Ensure Stablecoin Transparency – Issuers must maintain 1:1 fiat reserves to back their tokens.
✅ Strengthen Consumer Protections – The bill enforces strict AML and fraud-prevention measures.
✅ Promote the U.S. Dollar’s Global Position – Stablecoin regulation is viewed as a way to boost dollar dominance in digital finance.
Senate Debate & Political Divide
The bill, introduced in February 2025 by Senators Bill Hagerty, Kirsten Gillibrand, Cynthia Lummis, and Angela Alsobrooks, classifies payment stablecoins as digital assets tied to a fixed monetary value and used for transactions. It outlines federal licensing procedures, reserve mandates, and regulatory oversight mechanisms.
🔹 Federal Oversight for Large Issuers – Firms holding over $10 billion in stablecoins will fall under Federal Reserve regulation, while non-bank issuers will be supervised by the Office of the Comptroller of the Currency (OCC).
🔹 State-Level Control for Smaller Issuers – Firms below the threshold may continue operating under state regulation unless they opt for federal oversight.
🔹 Industry Backlash & Political Resistance – While some lawmakers praise the bill, others, including Senator Elizabeth Warren, argue that it lacks sufficient security measures to combat illicit finance risks.
Senator Bill Hagerty rejected amendments proposed by Warren, emphasizing that consumer protection, AML compliance, and crime prevention were already central to the legislation. On March 10, Hagerty also announced updates to the bill, reinforcing its compliance standards.
What’s Next?
The bill must now pass both the House and Senate before reaching President Trump’s desk for potential enactment into law. If approved, the GENIUS Act could redefine stablecoin regulations, providing long-awaited clarity and legitimacy to the growing digital asset industry.
