The U.S. Senate on Tuesday officially passed the “Guiding and Establishing National Innovation for U.S. Stablecoins Act” (GENIUS Act) by a vote of 68 to 30.
This landmark legislation marks the first time the U.S. federal government has established a comprehensive legal framework for regulating fiat-backed stablecoins. The bill aims to ensure financial stability, promote innovation, and protect consumer rights.
The Regulatory Gap in Digital Currency
With the rapid development of blockchain technology and the widespread adoption of digital assets, fiat-backed stablecoins such as USDC and USDT have demonstrated enormous potential in areas like payments, settlement, and cross-border transfers. However, the lack of a unified regulatory standard has left the stablecoin market in a state of fragmented oversight—caught between federal and state jurisdictions. While this ambiguity has created room for innovation, it has also posed systemic risks and compliance concerns.
The GENIUS Act emerged following extensive evaluation and consultation by agencies including the U.S. Department of the Treasury, the Federal Reserve, the Commodity Futures Trading Commission (CFTC), and the Securities and Exchange Commission (SEC). Spearheaded by Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY), the bill seeks to close regulatory gaps and strengthen America’s position in the global crypto-finance landscape.
Key Provisions of the Bill
According to the publicly available text, the GENIUS Act outlines several core elements:
Stablecoin Issuance Licensing System: The bill establishes a “Federal Stablecoin Issuer License,” to be issued by the Treasury Department’s newly created Office of Financial Innovation. Applicants must meet standards on capital adequacy, auditing, transparency reporting, Know Your Customer (KYC), and Anti-Money Laundering (AML) compliance.
100% Reserve Requirement: Licensed stablecoin issuers must ensure their tokens are fully backed by U.S. dollars or equivalent highly liquid and secure assets (such as short-term Treasury bonds) to prevent bank runs or systemic collapses.
Interstate Operating Rights & State Coordination: Licensed issuers will gain the right to operate across state lines under a unified federal standard, while allowing states with advanced fintech regulations (like Wyoming and New York) some degree of supplemental oversight.
Ban on Mislabeling Algorithmic Stablecoins: To avoid scenarios like the Terra collapse, the bill mandates clear labeling of the collateral model for each stablecoin. Algorithmic stablecoins may not be marketed as “U.S. dollar-backed” without independent audits.
Regulatory Sandbox & Innovation Support: To foster compliant innovation among startups and fintech firms, the bill introduces a regulatory sandbox that grants temporary exemptions for experimental products. An independent committee will evaluate the associated risks.
Applause from Wall Street and the Crypto Industry
Soon after the bill’s passage, leading stablecoin issuers such as Coinbase, Circle, and Paxos issued statements of support, calling it a “crucial step in establishing a regulatory foundation for U.S. leadership in digital finance.”
Circle CEO Jeremy Allaire said: “The GENIUS Act offers a clear and actionable compliance path, and could unlock wider stablecoin applications in the traditional financial system—including bank settlements, international trade payments, and government disbursements.”
Major Wall Street institutions such as JPMorgan Chase and Goldman Sachs also welcomed the bill, viewing it as a confidence booster and a milestone toward integrating digital assets into mainstream finance.
Following the announcement, both Bitcoin and Ethereum experienced brief price spikes, while USDC’s market cap saw a notable increase within hours—signaling growing market confidence in regulated stablecoins.

The GENIUS Act’s bipartisan passage is seen as a rare moment of unity in Congress on the contentious topic of crypto regulation. Amid deepening political polarization in Washington, cross-party support for the bill stands out.
Although some lawmakers—particularly progressive Democrats concerned about financial deregulation—voiced reservations about the sandbox and self-regulatory mechanisms, a majority agreed that the U.S. must not remain absent from the global rulemaking stage for digital finance.
As Senator Lummis stated, “Stablecoins are the digital extension of the U.S. dollar. Leaving this market unregulated would jeopardize our national financial security and innovative edge.”
House Review and Presidential Signature
While the bill has passed the Senate, it must now be approved by the House of Representatives and signed by the President to become law. Representative Patrick McHenry, Chair of the House Financial Services Committee, has previously voiced support for a stablecoin regulatory framework, leading markets to anticipate smooth passage in the House.
The Biden administration has already laid the groundwork for responsible innovation in digital finance through its 2023 “Framework for the Development of Digital Assets.” If enacted, the GENIUS Act would make the U.S. the first major economy to implement a comprehensive federal law regulating stablecoins.
Global Implications for Stablecoin Regulation
The GENIUS Act is likely to reverberate beyond U.S. borders. While the European Union has already passed its Markets in Crypto-Assets (MiCA) regulation, and countries like Japan and Singapore are gradually refining their digital asset rules, the U.S.—as the world’s financial epicenter—could serve as a regulatory benchmark.
Furthermore, the Act may prompt international organizations such as the G20 and IMF to accelerate efforts toward a unified global regulatory framework for digital currencies.