A historic bill has been approved in the United States Senate regarding stablecoin regulation that might become the beginning of cryptocurrency regulation. As part of the bill, dollar-pegged stablecoin issuers will hold a 1:1 reserve in short-term government debt or similar products overseen by state or federal regulators.
The US Senate Passes Landmark Stablecoin Bill
On Tuesday, June 17, the US Senate passed a stablecoin bill, which proposes a regulatory framework for dollar-pegged cryptocurrencies. A vote of 68-30 showed great bipartisan support for the bill.
Officially the bill is referred to as the Guiding and Establishing National Innovation of the US Stablecoins of 2025 Act or the GENIUS Act. GENIUS Act sponsors include Senators Bill Hagerty, Cynthia Lummis, and Tim Scott.
According to the sponsors, the bill could be the revenue for the reformation of the payment system of the United States. It could also strengthen the dominance of USD. The stablecoin bill was put together to implement a comprehensive legal system on US dollar-pegged stablecoins. The highlights of the bill are as follows:
Monthly Audits for Stablecoin Issuers
The main provisions of the bill stipulate that stablecoin issuers need to have liquid assets (US Dollars and short-term Treasury bills) to back their tokens on a 1:1 basis. As per the bill, stablecoin issuers will have to publish the contents of their reserves once every month.
The aim is to create an environment of transparency and reduce risk should they deal with undercollateralized or opaque stablecoins. Also, stablecoin issuers with over $50 billion outstanding coins would be subject to annual audits and would have to meet the standards of anti-money-laundering and sanctions screening.
Regulatory Status
The bill also made it clearer on the status of stablecoins in terms of regulation. The GENIUS Act does not treat stablecoins as securities or commodities. The regulatory status of stablecoins has been a hotly debated topic that has restricted its use.
How This Bill Could Affect the Use of Stablecoins
Per CoinMarketCap, the stablecoin market cap currently stands at over $256 billion. With the potential for more institutional use, Treasury Secretary Scott Bessent has projected that the market cap could grow to $3.7 trillion by 2030.
However, for years, the cryptocurrency industry has been existing in the regulatory grey zone in the US. Because of the lack of clarity, the mainstream use of stablecoins has been limited. That is why the stablecoin bill is a watershed moment for cryptocurrencies.
The GENIUS Act is the first step to regulatory clarity and may result in more institutional use of stablecoins. Big banks and payment processors in the US are already exploring or testing the usage of stablecoins.
More financial institutions could now use stablecoins because of the regulatory clarity. They might start officially using more stablecoins for faster and cheaper settlements, both domestically and internationally.
What Next?
The bill will now be pushed to the House of Representatives. Without amendments by the House, the bill would go to President Donald Trump, who would presumably sign it. This could possibly pave the way toward legislation of the rest of the crypto market.
