The crypto industry has scored a major victory with the passage of the GENIUS Act — the first bill in the United States to regulate cryptocurrency. In particular, the bill focuses on stablecoins, which are any cryptocurrency that has a value tied to that of another asset, like the U.S. dollar or gold. With the Senate passing the bill in a 68-30 bipartisan vote, the GENIUS Act now heads to the House for approval.
The GENIUS Act, Explained
The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act is the first U.S. bill that regulates cryptocurrencies. If signed into law, it would offer more clarity and confidence around the use of stablecoins, potentially encouraging wider adoption and industry growth.
This shift in U.S. policy reflects President Donald Trump’s embrace of the crypto industry as a whole, and builds on the more crypto-friendly environment he has established in the first months of his second term. But not everyone is thrilled about the prospect of this bill becoming law. Here’s a look at what exactly the GENIUS Act does and what it means for the future of stablecoins and cryptocurrencies in general.
What Is the GENIUS Act?
An acronym for Guiding and Establishing National Innovation for U.S. Stablecoins, the GENIUS Act is the first U.S. bill that aims to regulate cryptocurrencies — in this case, stablecoins. Stablecoins are usually pegged 1:1 to the value of another asset, protecting them from the volatility seen in other cryptocurrencies like Bitcoin. But stablecoins aren’t immune to the usual risks of crypto investing. That’s why the GENIUS Act provides more guardrails for the currency by doing the following:
- Establishing rules for stablecoin issuers like segregation of reserves, monthly audits and minimum liquid capital requirements.
- Creating anti-money laundering and anti-terrorism processes.
- Allowing stablecoins to be issued only to permitted parties.
- Granting the Department of Treasury, Federal Reserve, Office of the Comptroller of the Currency and FDIC greater regulatory power.
- Prioritizing stablecoin owners when a custodian or issuer files for bankruptcy.
The overall idea is to make stablecoins an even more reliable currency to invest in, spurring the growth of the crypto economy.
What Does the GENIUS Act Mean for the Crypto Industry?
If it becomes law, the GENIUS Act promises to bring federal oversight to stablecoins, which could have a major impact on the broader crypto industry. By setting clear rules and consumer protections, the bill aims to instill confidence in a sector that has seen a lot of instability — particularly in the last few years.
In 2022, crypto suffered a damaging blow in the wake of the FTX collapse and subsequent imprisonment of its founder Sam Bankman-Fried, with investors losing billions of dollars at the time. That same year, the stablecoin, terra, collapsed when the mechanisms used to maintain its value failed. These events shook consumer faith in cryptocurrencies and discredited the entire industry, triggering a crypto winter.
But crypto is heating up once again, and the GENIUS Act could stoke the flames of a full-blown comeback. Official regulations would offer more direction around how stablecoins can be used, and provide protective measures to defend investors. It could provide the safety net investors, financial institutions and businesses need to treat stablecoins like a more trustworthy and legitimate currency. This, in turn, would encourage wider adoption of stablecoins — and, by extension, broader acceptance of crypto as a whole.
The Response to the GENIUS Act So Far
While the GENIUS Act seems like a clear win for the crypto industry and its supporters, it has also evoked claims of corruption from critics.
Praise for the Bill as a Crypto Milestone
Republicans stood in unanimous support of the GENIUS Act, and 18 of the 45 Senate Democrats voted across the aisle to push the bill through. Notably, Republican Senator and Chairman of the Senate Banking Committee Tim Scott called the passage of the bill a “bold step forward” by “bringing clarity to a sector that’s been clouded by uncertainty.”
Not surprisingly, crypto companies have applauded the bill as well, with leaders from Coinbase, Gemini and Ripple all sharing their approval. This comes on the heels of crypto advocates spending millions to influence U.S. elections. According to Follow the Crypto, crypto-focused PACs raised more than $197 million to elect pro-crypto politicians into office. It seems their efforts are paying off.
Criticism of the Bill as a Tool for Corruption
On the other hand, critics have warned that the bill has some shortcomings. For instance, Democratic Senator Elizabeth Warren says it doesn’t go far enough in protecting consumers from financial risks and opens the door for further government corruption. Other Senators like Jack Reed have echoed these sentiments.
These concerns are valid, given that President Trump raked in $57.4 million in income in 2024 from his family-backed crypto venture World Liberty Financial. While the GENIUS Act prevents “any member of Congress or senior executive branch official from issuing a payment stablecoin product during their time in public service,” it doesn’t impact Trump’s prior investment in World Liberty Financial.
Even if the bill is presented as a building block for crypto regulation, potential loopholes raise questions around who the bill really benefits — everyday consumers or crypto leaders and their political allies.
Frequently Asked Questions
What does the GENIUS Act stand for?
The GENIUS Act is an acronym that’s short for Guiding and Establishing National Innovation for U.S. Stablecoins.
Did the GENIUS Act pass?
The GENIUS Act passed the U.S. Senate in a 68-30 vote. However, it still needs to pass the House before President Trump can sign it into law
What are stablecoins?
Stablecoins are a type of cryptocurrency designed to keep a steady — or “stable” — value by tying their price to traditional assets like the U.S. dollar or gold. While most cryptocurrencies are highly volatile, stablecoins aim to bring some consistency to the industry. They’re often used for trading and transferring money quickly and securely.
