Summary
GENIUS is an act of the (bipartisan) Senate seeking to establish the first regulatory framework in the U.S. over payment stablecoins.
It is co-sponsored by Senator Bill Hagerty (R-TN) and Senator Kirsten Gillibrand (D-NY), and it manipulates major issues: AML, consumer protections, and foreign oversight.
The proposed amendments are revised with greater protection, bankruptcy protection, and limitation of Big Tech and some people to issue stablecoins.
The total market cap of stablecoins in the world is over $246 billion, and there are giant stablecoins, such as Tether (USDT) and Circle (USDC).
Senator Hagerty thinks that the legislation will make the U.S. dollar the leader of the digital economy and attract fintech innovation in the country.
The Senate vote must get at least 60 votes as a measure to pass, it is highly important that the two sides are not divided as the vote stands at 51-49 currently.
What Is the GENIUS Act?
GENIUS Act A bold attempt to put stablecoins, which are digital tokens that are pegged to the U.S. dollar, on a clear regulatory path in America is the first move, the Guaranteed Electronic USD Issuance and Safeguards Act (GENIUS Act).
The stablecoin market value has grown to exceed $246 billion globally, led by such large stablecoins as Tether’s USDT ($151B) and Circle’s USDC ($61B).
Bi-Partisan Workings in the Face of Adversity
One of the co-sponsors of the bill is Senator Bill Hagerty (R-TN) who is hopeful despite the initial failures.
The bill was voted down on May 8 after barely falling short of the 60 votes necessary to invoke cloture with 48 to 49 voting against.
Democratic senators raised objections based on lax anti-money laundering provisions, no regulation of foreign-issued stablecoins, and lack of consumer protections.
In answer, bipartisan negotiations gave the bill an edge with:
- Augmented consumer protection
- Better bankruptcy protections to those who hold stablecoins
- Ethical bans that do not allow Big Tech giants (Meta, Google) and such powerful individuals as Elon Musk to issue stablecoins
These amendments are to achieve foundations with greater assistance and congruence with investor protection and national security leaders.
What Makes the GENIUS Act Important?
Senator Hagerty underlines the fact that the GENIUS Act will solidify the global dominance of the U.S. dollar in a digital economy, which will cause U.S. Treasuries demand and promote fintech development in American territory.
As payment leaders, such as Mastercard, provide their services with the options of stablecoins to millions of merchants, the need of regulatory transparency increase.
Is the GENIUS Act Possible?
The bill is weak with the Senate equally divided (51 Democrats, 49 Republicans) with moderate senators having to be on both sides of the party to pass it.
A move of 9 to 11 lawmakers would open the way to making the GENIUS Act a historic act with an international benchmark in digital dollar issuance and regulation.
The May 19, 2025 vote is yet another pivotal step towards the future of digital currency in the U.S. that might pave the way to the paradigm change in financial innovation in the country in the coming years.