Senate's initial vote on the GENIUS stablecoin bill falls short, indicating a setback, while still demonstrating some degree of advancement.
Bipartisan GENIUS Act Becomes Law, Despite Democratic Objections
The GENIUS Act, a landmark bill that establishes the first federal regulatory framework for stablecoins in the United States, has been signed into law by President Donald Trump on July 22, 2025. The bill, which passed the Senate on June 17 with a vote of 68–30 and the House on July 17 with a vote of 308–122, marks a significant step forward in regulating the digital asset industry.
Despite some objections from Democrats, the bill received bipartisan support throughout its legislative journey. Initially, the Senate passed the bill with support from 17 Democrats and 51 Republicans. However, the House faced internal disagreements, with some Republican opposition causing procedural delays. Nevertheless, the House ultimately passed the Senate version without amendments to avoid further Senate reconsideration.
Senator John Thune, a key Republican proponent of the bill, accused Democrats of obstructing the GENIUS Act. Senator Ruben Gallego, a Democrat, had warned last weekend that Democrats would not vote for cloture on the current version of the bill. Gallego requested postponing the vote until Monday for further debate, but his request was met with an objection, believed to be from Senator Elizabeth Warren. This objection would have required unanimous consent, preventing the postponement.
Senator Thune questioned whether the Democrats' objections were about the bill or about obstructing for political reasons. He pointed out that the bill went through multiple iterations and many modifications were made to satisfy Democrat demands. Senator Gallego, however, expressed optimism about finding a bipartisan pathway for the bill to pass. He even thanked the Republicans for their efforts to improve the content of the GENIUS Act.
The GENIUS Act establishes a federal-state supervision and enforcement regime over payment stablecoin issuers. Key provisions are set to take effect around November 2026. The bill's passage paves the way for follow-up bills like the CLARITY Act, which are currently moving through Congress.
Notably, the Trump family stablecoin, USD1, was used for a $2 billion payment by a UAE firm. The UAE firm is chaired by the country's national security adviser and brother of the President. Some Democrats, including Senator Warren, have expressed concerns about President Trump's conflicts of interest with crypto.
In a separate development, $TRUMP memecoin holders are scheduled to have dinner with the President. This event has sparked controversy, with critics arguing it could be seen as an endorsement of the digital asset.
As the GENIUS Act becomes law, it signifies a significant milestone in the regulation of the digital asset industry. Despite the objections and procedural challenges, the bill's bipartisan process has resulted in a comprehensive regulatory framework that will shape the future of stablecoins in the United States.
- As the GENIUS Act paves the way for future bills like the CLARITY Act, financial analysis must take into account how these regulations may affect the stability and growth of the stablecoin industry within the US business sector.
- The bipartisan support for the GENIUS Act is a testament to the potential of technological advancements in finance, such as stablecoins, in fostering collaboration across political lines and driving innovation in the banking industry.
- With the passage of the GENIUS Act, experts predict a surge in banking institutions' examination of stablecoins to gain insights and establish a stable foothold in the rapidly evolving landscape of finance and technology.
