Senate Approves GENIUS Act, Advancing Regulations for Digital Currencies with Stable Value
The U.S. Senate has taken a significant step forward in regulating the digital asset sector, as the GENIUS Act was approved with a vote of 68-30. Sponsored by Senator Bill Hagerty, the GENIUS Act aims to establish clearer federal guidelines for dollar-backed stablecoins, marking a landmark moment in the development of a robust regulatory regime.
The bill, which has now been passed by both chambers of the U.S. Congress and signed into law by President Trump on July 18, 2025, requires full 1:1 backing of stablecoins with U.S. dollars or short-term U.S. Treasury bills. It also mandates monthly reserve disclosures, annual audits for large issuers, and strict anti-money laundering compliance. The law's primary objective is to provide transparency, safety, and regulatory clarity, significantly impacting stablecoin issuers and users by legitimizing and stabilizing the sector.
The earlier stall of the GENIUS Act was largely due to Democratic resistance tied to President Donald Trump's ties to the crypto sector, particularly World Liberty Financial. However, the Senate version of the GENIUS Act does not include any amendments addressing former President Trump's ties to World Liberty Financial.
Meanwhile, lawmakers anticipate renewed debate over the STABLE Act, with plans to introduce amendments aimed at strengthening oversight and addressing concerns. The STABLE Act, companion legislation to the GENIUS Act, is expected to be next on the House docket. However, disagreements in Congress between supporters of the GENIUS Act and those favoring inclusion of STABLE Act provisions have led to the GENIUS Act ultimately passing without incorporating all elements of the STABLE Act.
The CLARITY Act, a bill designed to create a comprehensive regulatory framework for digital assets, has also been advanced by the US House Agriculture Committee, reflecting growing bipartisan consensus on the need for clearer oversight and defined jurisdiction within the digital asset sector.
As the GENIUS Act takes effect, major tech and social media players are exploring the possibility of corporate-issued tokens if the GENIUS Act recognizes payment stablecoins under a formal U.S. regulatory framework. This development could further solidify the United States' position as a global leader in digital asset regulation.
The effective enforcement provisions of the GENIUS Act are expected to take full effect by late 2026, giving regulatory bodies and market participants time to comply. However, the bill's future amendments and the fate of the STABLE Act remain uncertain, as ongoing Congressional discussions on digital asset legislation continue.
- The passage of the GENIUS Act marks a milestone in the regulation of digital assets, particularly the dollar-backed stablecoins, with the law mandating full 1:1 backing, monthly reserve disclosures, annual audits, and strict anti-money laundering compliance.
- With the impending effective enforcement of the GENIUS Act, major tech and social media companies are considering the issuance of corporate-backed tokens if the Act acknowledges payment stablecoins within a formal U.S. regulatory framework.
- Amendments to the STABLE Act and possible future modifications to the GENIUS Act are still subject to ongoing discussions in Congress as the United States continues to build a comprehensive regulatory framework for digital assets, as evidenced by the advancement of the CLARITY Act.
