On June 17, in the afternoon Eastern Time, the U.S. Senate passed the landmark cryptocurrency legislation known as the "GENIUS Act" (Guiding and Establishing National Innovation for U.S. Stablecoins Act) with a vote of 68 in favor and 30 against. The next step is to submit it to the House of Representatives for review. If it passes without amendments, it will soon be presented to President Trump for signing into law. In fact, the House does not need an absolute majority vote for approval.
"After the GENIUS Act has passed the Senate threshold, the road ahead is smooth sailing. This is a historic lobbying victory for digital asset companies in the Senate's first vote on comprehensive regulatory reform for cryptocurrency. As Tennessee Senator Bill Hagerty, a key figure behind the GENIUS Act, put it, 'America has taken another step toward becoming the crypto capital.'"
Overview of the Core Provisions of the "GENIUS Act"
The key provisions of the bill are as follows —
Mandatory 1:1 full assets: the scope includes cash, demand deposits in banks, and short-term U.S. Treasury bonds. At the same time, misappropriation and re-pledging are strictly prohibited, and it is exclusively used for payment settlement scenarios.
High-frequency transparency disclosure: reserves composition and redemption policy must be regularly disclosed and subjected to compliance audits by registered accounting firms.
Dual licensing system: Once the circulating market value of the issuer's stablecoin exceeds 10 billion USD, it must transition to a federal regulatory system within a specified period, adopting bank-level regulation. Below this threshold, state-level regulation may be applied, and small issuers can choose state registration (provided they meet federal equivalency standards).
Anti-Money Laundering Compliance: Bring stablecoin issuers and their custodians under the jurisdiction of the Bank Secrecy Act, fulfilling AML obligations at the level of financial institutions.
Clearly defined as a payment medium: The bill clearly defines stablecoins as a new type of payment medium, primarily constrained by the banking regulatory system, rather than being subject to the constraints of securities or commodities regulatory systems.
The existing stablecoins are urged to comply: after the bill takes effect, there will be a maximum 18-month grace period, intended to prompt the issuers of existing stablecoins (such as USDT, USDC, etc.) to quickly obtain licenses or comply.
Then, the "GENIUS Act" will address the following historical issues.
*GENIUS Act Detailed Portal:
The Tug of War Between the Two Parties in the U.S.
Tennessee Senator Bill Hagerty, one of the initiators of the GENIUS Act, expressed his "victory speech" at the first opportunity. He stated that the GENIUS Act establishes the first growth-friendly regulatory framework for payment stablecoins. This act will reinforce the dominance of the USD, protect customers, increase demand for US Treasury bonds, and ensure that innovation in the digital asset space remains in the hands of the United States, rather than in the hands of adversaries.
By combining the advantages of the USD with the speed and efficiency of blockchain technology, the GENIUS Act promotes the adoption of cryptocurrency in the trade community and paves the way for a new generation of payment processing. Once the GENIUS Act becomes law, companies, small businesses, and individuals will be able to complete payments almost instantly, rather than waiting days or weeks and incurring corresponding fees. In short, stablecoins represent a paradigm shift that can bring our payment systems into the twenty-first century.
The legislation specifies the procedures for issuing stablecoins, designates clear roles for federal and state regulatory agencies, implements consumer protection standards, and includes strong safeguards to prevent illegal activities. Projections show that with the passage of the GENIUS Act, by 2030, stablecoin issuers will become the largest holders of U.S. Treasury securities globally. Such an outcome will enhance fiscal resilience and solidify the dollar's position as the world's reserve currency.
U.S. Treasury Secretary Scott Bessent expressed support for the "GENIUS Act" at a critical juncture, stating that the stablecoin market is expected to grow to $3.7 trillion by the end of this decade. Bessent noted that a stablecoin ecosystem backed by U.S. Treasuries will drive private sector demand for U.S. Treasuries, potentially lowering government borrowing costs and helping to control national debt. He believes this is an innovative legislation that benefits all three parties, enabling the private sector, the Treasury, and consumers to gain, while also facilitating more users globally to enter the U.S. dollar-based digital asset economy.
However, the day before, the prominent Democratic "crypto hawk" and senior Democratic senator on the Senate Banking Committee, Elizabeth Warren, maintained a tough stance. She pointed out that the GENIUS Act has a significant loophole that allows big tech companies and large retailers to issue their own private currencies and structure them as stablecoins. If Congress does not amend the GENIUS Act, billionaires like Elon Musk and Jeff Bezos will launch stablecoins that track your shopping behavior, exploit your data, and squeeze out competitors.
In fact, in the case of the GENIUS Act, Democratic Senator Elizabeth Warren has always been a major force obstructing the progress of the GENIUS Act. It was also due to the collective opposition of Democratic Senators that the GENIUS Act failed to advance further in the Senate vote on May 8, receiving only 49 votes (not meeting the minimum requirement of 60 votes).
The reason some Democrats ultimately switched sides is that the demands put forward by Elizabeth Warren were met. According to a previous NBC report, representatives from both parties reached an agreement through negotiations, which included the addition of some amendments to the bill in exchange, such as changes to consumer protection measures and restrictions on technology companies issuing stablecoins, as well as expanding ethical standards to include special government employees. Currently, large technology companies face many restrictions on issuing stablecoins. First, a regulated subsidiary dedicated to stablecoin operations needs to be established. Second, they must accept prudent regulation equivalent to that of financial institutions. Third, they must strictly adhere to data privacy standards, which to some extent mitigates the risk of large technology companies launching 'shadow currencies' through ecological monopolies.
Tether Where to Go from Here
Currently, the world's largest stablecoin issuer Tether (USDT) is likely to become the first and largest "victim" of the "GENIUS Act."
Currently, USDT is only about 85% backed by cash and cash equivalents, failing to meet the mandatory 1:1 cash and equivalents requirement. Moreover, its auditing firm BDO Italia does not comply with the standards of the Public Company Accounting Oversight Board (PCAOB), making it even harder to be accepted by the U.S. system.
At the same time, Tether's headquarters has moved to El Salvador, seeking political asylum from the pro-cryptocurrency president of El Salvador. Tether CEO Paolo Ardoino has hinted that the original USDT may no longer directly enter the U.S. market, but instead a settlement stablecoin branch compliant with the GENIUS Act framework will be launched. However, in markets outside the U.S., the originally dominant USDT business is unlikely to be easily relinquished.
Therefore, the influence of the "GENIUS Act" is currently more focused on the US domestic scene, serving more as a benchmark in the field of cryptocurrency regulation. The traditional stablecoin market will not disappear overnight. However, with the evolution of compliance, compliant stablecoins will undoubtedly rise to become mainstream in the future. The 600% increase within 10 days after Circle's listing may just be the beginning of the stablecoin blue ocean.
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The "GENIUS Act" passes the Senate, is the US really going to become the capital of Crypto Assets?
Written by: Bright, Foresight News
On June 17, in the afternoon Eastern Time, the U.S. Senate passed the landmark cryptocurrency legislation known as the "GENIUS Act" (Guiding and Establishing National Innovation for U.S. Stablecoins Act) with a vote of 68 in favor and 30 against. The next step is to submit it to the House of Representatives for review. If it passes without amendments, it will soon be presented to President Trump for signing into law. In fact, the House does not need an absolute majority vote for approval.
"After the GENIUS Act has passed the Senate threshold, the road ahead is smooth sailing. This is a historic lobbying victory for digital asset companies in the Senate's first vote on comprehensive regulatory reform for cryptocurrency. As Tennessee Senator Bill Hagerty, a key figure behind the GENIUS Act, put it, 'America has taken another step toward becoming the crypto capital.'"
Overview of the Core Provisions of the "GENIUS Act"
The key provisions of the bill are as follows —
Mandatory 1:1 full assets: the scope includes cash, demand deposits in banks, and short-term U.S. Treasury bonds. At the same time, misappropriation and re-pledging are strictly prohibited, and it is exclusively used for payment settlement scenarios.
High-frequency transparency disclosure: reserves composition and redemption policy must be regularly disclosed and subjected to compliance audits by registered accounting firms.
Dual licensing system: Once the circulating market value of the issuer's stablecoin exceeds 10 billion USD, it must transition to a federal regulatory system within a specified period, adopting bank-level regulation. Below this threshold, state-level regulation may be applied, and small issuers can choose state registration (provided they meet federal equivalency standards).
Anti-Money Laundering Compliance: Bring stablecoin issuers and their custodians under the jurisdiction of the Bank Secrecy Act, fulfilling AML obligations at the level of financial institutions.
Clearly defined as a payment medium: The bill clearly defines stablecoins as a new type of payment medium, primarily constrained by the banking regulatory system, rather than being subject to the constraints of securities or commodities regulatory systems.
The existing stablecoins are urged to comply: after the bill takes effect, there will be a maximum 18-month grace period, intended to prompt the issuers of existing stablecoins (such as USDT, USDC, etc.) to quickly obtain licenses or comply.
Then, the "GENIUS Act" will address the following historical issues.
*GENIUS Act Detailed Portal:
The Tug of War Between the Two Parties in the U.S.
Tennessee Senator Bill Hagerty, one of the initiators of the GENIUS Act, expressed his "victory speech" at the first opportunity. He stated that the GENIUS Act establishes the first growth-friendly regulatory framework for payment stablecoins. This act will reinforce the dominance of the USD, protect customers, increase demand for US Treasury bonds, and ensure that innovation in the digital asset space remains in the hands of the United States, rather than in the hands of adversaries.
By combining the advantages of the USD with the speed and efficiency of blockchain technology, the GENIUS Act promotes the adoption of cryptocurrency in the trade community and paves the way for a new generation of payment processing. Once the GENIUS Act becomes law, companies, small businesses, and individuals will be able to complete payments almost instantly, rather than waiting days or weeks and incurring corresponding fees. In short, stablecoins represent a paradigm shift that can bring our payment systems into the twenty-first century.
The legislation specifies the procedures for issuing stablecoins, designates clear roles for federal and state regulatory agencies, implements consumer protection standards, and includes strong safeguards to prevent illegal activities. Projections show that with the passage of the GENIUS Act, by 2030, stablecoin issuers will become the largest holders of U.S. Treasury securities globally. Such an outcome will enhance fiscal resilience and solidify the dollar's position as the world's reserve currency.
U.S. Treasury Secretary Scott Bessent expressed support for the "GENIUS Act" at a critical juncture, stating that the stablecoin market is expected to grow to $3.7 trillion by the end of this decade. Bessent noted that a stablecoin ecosystem backed by U.S. Treasuries will drive private sector demand for U.S. Treasuries, potentially lowering government borrowing costs and helping to control national debt. He believes this is an innovative legislation that benefits all three parties, enabling the private sector, the Treasury, and consumers to gain, while also facilitating more users globally to enter the U.S. dollar-based digital asset economy.
However, the day before, the prominent Democratic "crypto hawk" and senior Democratic senator on the Senate Banking Committee, Elizabeth Warren, maintained a tough stance. She pointed out that the GENIUS Act has a significant loophole that allows big tech companies and large retailers to issue their own private currencies and structure them as stablecoins. If Congress does not amend the GENIUS Act, billionaires like Elon Musk and Jeff Bezos will launch stablecoins that track your shopping behavior, exploit your data, and squeeze out competitors.
In fact, in the case of the GENIUS Act, Democratic Senator Elizabeth Warren has always been a major force obstructing the progress of the GENIUS Act. It was also due to the collective opposition of Democratic Senators that the GENIUS Act failed to advance further in the Senate vote on May 8, receiving only 49 votes (not meeting the minimum requirement of 60 votes).
The reason some Democrats ultimately switched sides is that the demands put forward by Elizabeth Warren were met. According to a previous NBC report, representatives from both parties reached an agreement through negotiations, which included the addition of some amendments to the bill in exchange, such as changes to consumer protection measures and restrictions on technology companies issuing stablecoins, as well as expanding ethical standards to include special government employees. Currently, large technology companies face many restrictions on issuing stablecoins. First, a regulated subsidiary dedicated to stablecoin operations needs to be established. Second, they must accept prudent regulation equivalent to that of financial institutions. Third, they must strictly adhere to data privacy standards, which to some extent mitigates the risk of large technology companies launching 'shadow currencies' through ecological monopolies.
Tether Where to Go from Here
Currently, the world's largest stablecoin issuer Tether (USDT) is likely to become the first and largest "victim" of the "GENIUS Act."
Currently, USDT is only about 85% backed by cash and cash equivalents, failing to meet the mandatory 1:1 cash and equivalents requirement. Moreover, its auditing firm BDO Italia does not comply with the standards of the Public Company Accounting Oversight Board (PCAOB), making it even harder to be accepted by the U.S. system.
At the same time, Tether's headquarters has moved to El Salvador, seeking political asylum from the pro-cryptocurrency president of El Salvador. Tether CEO Paolo Ardoino has hinted that the original USDT may no longer directly enter the U.S. market, but instead a settlement stablecoin branch compliant with the GENIUS Act framework will be launched. However, in markets outside the U.S., the originally dominant USDT business is unlikely to be easily relinquished.
Therefore, the influence of the "GENIUS Act" is currently more focused on the US domestic scene, serving more as a benchmark in the field of cryptocurrency regulation. The traditional stablecoin market will not disappear overnight. However, with the evolution of compliance, compliant stablecoins will undoubtedly rise to become mainstream in the future. The 600% increase within 10 days after Circle's listing may just be the beginning of the stablecoin blue ocean.