The Senate approved the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act) on May 19. This bill, which aims to regulate the stablecoin market, passed by a vote of 66-32, leading to discussions on the Senate floor. This outcome was noteworthy as it involved Democrats Mark Warner, Adam Schiff, and Ruben Gallego voting differently than they typically do.
Initially, opponents of the bill expressed concerns about potential ethical issues related to Donald Trump’s family launching a USD 1 stablecoin. However, the passage of this legislation demonstrates that politicians from both parties are willing to collaborate on stablecoin regulation, as more people recognize the growing influence of digital currencies in modern finance.
Progress on the GENIUS Act has faced many criticisms. One of the biggest opponents of the bill has been Senator Elizabeth Warren. She warned that the bill's passage could support and legitimize the USD1 stablecoin used by Trump’s family. According to her, the bill ignored an effort to boost Trump’s corruption.
At the same time, Senator Warner accepted these ethics as concerns and urged for further regulations. He pointed out that blockchain and digital assets are too important to ignore, so the Senate should pass practical laws and avoid political delays in overseeing them.
The GENIUS Act, which Senator Bill Hagerty proposed, suggests guidelines for stablecoin issuers. This requires all stablecoins to have enough liquid and verifiable assets to support them. Every issuer must be reviewed by outside auditors and obtain a license from the government. The bill further introduces rules for algorithmic stablecoins since using these without collateral has led to disruptions in past markets.
They believe the bill helps protect consumers and increases transparency related to digital currencies. She hoped that the Senate would approve the bill by Memorial Day, May 26. Once in effect, the law is expected to modify the oversight of stablecoins in the United States. It demonstrates that the government is focusing more on digitizing its financial rules and regulations.