The U.S. crypto industry is moving a step closer to having stablecoin regulation signed into law as the Senate Banking Committee approves the GENIUS Act.
The approval came on Thursday with an 18 to 6 vote in favor of the bill. This approval marks a major step toward President Donald Trump signing the stablecoin bill into law. For context, GENIUS stands for the Guiding and Establishing National Innovation for U.S. Stablecoins Act
Next Line of Action
Following the Senate Banking Committee’s approval, the bill will be sent to the full Senate for passage. It is worth noting that a similar version of the GENIUS Act is also awaiting approval in the House of Representatives.
Hence, both bills must be combined before being signed into law to regulate stablecoin issuers at the federal level.
Debates Leading to GENIUS Act Approval
The approval follows a committee hearing that lasted over two hours. Although the GENIUS Act received bipartisan support, some Democratic Senators proposed additional measures to include regulatory limits and controls.
Crypto critic Elizabeth Warren (D-MA) expectedly expressed concerns about the passage of the GENIUS Act, emphasizing that it poses national security risks.
During the hearing, she criticized the idea of moving forward with the bill amid reports that the President is seeking to develop his own stablecoin via a partnership with a company ‘notorious for breaking the law.’
The report Warren cited relates to alleged discussions between Trump’s family project World Liberty Financial, and Binance. For context, WSJ reported that Binance sought a presidential pardon for its founder, Changpeng Zhao (CZ), in exchange for a business deal with World Liberty. However, CZ denied this claim, noting that the WSJ report was misleading.
Despite CZ’s statement, Warren still thinks it is improper to advance the GENIUS Act amid the rumors, asserting, “We’ll regret this!”
In contrast, Republicans on the Senate Banking Committee, including Senator Tim Scott, defended the process. Senator Scott, who chaired the Committee, noted that the approval aligns with the Committee’s commitment to providing U.S. investors with regulatory clarity.
In his view, the advancement of the stablecoin bill will “keep innovation on American soil rather than driving it overseas.”
New Amendments
Meanwhile, the committee made some bipartisan amendments to the GENIUS Act before its approval. Eleanor Terrett, a pro-crypto journalist and host of the Crypto America Podcast, highlighted some of these amendments in a tweet yesterday.
They include clarifications for payment stablecoins not issued by permitted issuers, the prohibition of using deceptive names for stablecoins, and the prioritization of stablecoin customers over creditors during a bankruptcy.
Ripple CEO Reacts
Reacting to the development, Ripple CEO Brad Garlinghouse declared that stablecoin regulation is moving forward in the United States.
He took a moment to appreciate the commitment of some Senators like Bill Hagerty, Cynthia Lummis, Kirsten Gillibrand, and Tim Scott for their efforts on the GENIUS Act.
https://twitter.com/bgarlinghouse/status/1900276091920564225
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