The US Senate has taken the first major step towards federal regulation of stablecoins by passing the GENIUS Act, which is considered a major milestone in the cryptocurrency industry. The bill, which passed with the support of some Democratic senators, has begun to put pressure on the House of Representatives on the future of digital assets.
The bill, introduced by Republican Senator Bill Hagerty, has passed the Senate, becoming the first major piece of legislation in US history regarding cryptocurrencies. Hagerty thanked senators who expressed their support ahead of the vote. The bill successfully passed the final vote, as expected, in the preliminary vote that was held by a large majority last week.
The final Senate vote came after weeks of committee deliberations, procedural votes and a failed vote last month when Democrats withdrew their support. Since US President Donald Trump took office this year, his administration has been calling on Congress to create a clear legal framework for cryptocurrencies.
The new law requires stablecoins to be fully backed only by US dollars or similar liquid assets. It also requires annual audits for stablecoin issuers with a market value of over $50 billion. The law also includes regulations for foreign issuers.
The law also places strict criteria on large publicly traded companies, such as tech giants Meta and Amazon, from issuing stablecoins. These companies will not be able to issue stablecoins unless they meet specific conditions regarding financial risk and user data privacy.
Another noteworthy article of the law is related to bankruptcy cases: Stablecoin owners are given “bankruptcy priority”, giving them the right to get their funds back first in the event of a possible bankruptcy. This situation is designed to protect existing depositors in banks.
*This is not investment advice.
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