On May 20, the U.S. Senate voted 66 to 32 in favor of advancing the GENIUS Act, a bill aimed at regulating stablecoins, moving it into formal debate. The legislation is expected to complete the legislative process by Memorial Day (May 26).
Why the GENIUS Act Matters: Tight Oversight on Stablecoin Issuers
If passed, the GENIUS Act will have significant implications, especially for companies like Tether (USDT) and Circle (USDC) operating in the U.S. Key effects include:
- Stricter regulatory oversight for stablecoin issuers like Tether and Circle.
- New stablecoin issuers will face near-impossible hurdles without state or federal licensing.
What Previously Blocked It: Trump Family Business Ties Sparked Concern
The bill almost failed on May 8, primarily due to concerns from several Democratic senators. They worried that members of the Trump family might financially benefit from the bill through their involvement in crypto projects. Additionally, the anti-money laundering (AML) provisions were deemed too weak.
However, after urgent revisions to strengthen AML safeguards and address conflict-of-interest concerns, several previously opposed senators agreed to support the bill, enabling it to pass the vote.
GENIUS Act Key Highlights:
- Stablecoins must be 100% asset-backed
- Issuers must obtain state or federal licenses
- Regular security audits and disclosures required
- Algorithmic stablecoins will be restricted or banned
- Issuers with over $10 billion in assets will be regulated by the SEC, while smaller issuers fall under state-level regulation
Senator Warren Opposed the Bill, But Couldn’t Stop It
Democratic Senator Elizabeth Warren made a final attempt to rally opposition ahead of the vote, reiterating her concern that Trump allies could exploit the bill for personal gain. Despite her efforts, the bill passed.
According to crypto advocacy group Stand With Crypto, video from the Senate floor showed Warren remaining silent and visibly disheartened once the results were clear.
Netizens commented, “She looks like she has a thousand words to say, but couldn’t say a thing.”
Warren ultimately failed to stop what may become the most significant U.S. crypto regulation in years.
