The US Senate has approved the GENIUS Act, establishing a federal framework for dollar-pegged stablecoins. The bill requires full backing by liquid assets and aims to reinforce US dollar dominance. It passed with bipartisan support amid debates over risks and political ties.
In June 2025, the US Senate passed the GENIUS Act by a vote of 68-30, creating a regulatory framework for payment stablecoins. The legislation mandates that these stablecoins be fully backed by liquid assets such as US dollars and short-term Treasury securities, with monthly public disclosures of reserves. It builds on the earlier Lummis-Gillibrand Payment Stablecoin Act, dividing oversight between federal bank regulators and state authorities.
The bill positions regulated stablecoins as a means to promote US dollar dominance while addressing risks related to reserves, custody, insolvency, and privacy. Senator Kirsten Gillibrand stated, “Passing a regulatory framework for stablecoins is absolutely critical to maintaining the U.S. dollar’s dominance, promoting responsible innovation, protecting consumers and cracking down on money laundering and illicit finance.” Proponents argue it will enable banks and licensed non-banks to issue efficient payment tokens for global transactions.
However, the process faced political hurdles. Democratic support wavered in May 2025 due to concerns over weakened safeguards for foreign stablecoins and anti-money-laundering measures, particularly amid links to President Trump’s World Liberty Financial venture and a $2 billion Abu Dhabi-backed investment in Binance. Senator Elizabeth Warren criticized the bill as a “super highway” for corruption, warning it might allow tech giants like Amazon and Meta to launch tokens without adequate constraints.
Supporters highlight the bill's potential to curb illicit finance, citing UN estimates of $17 billion in such transactions via unregulated offshore stablecoins from 2022 to 2023. US Treasury officials suggest regulated stablecoins could drive trillions in demand for Treasuries by 2030, integrating crypto into traditional finance while prioritizing US interests. Critics, however, caution it may entrench certain ventures and create a two-tier system that marginalizes offshore 'grey-market' stablecoins.
