- The U.S. Senate Banking Committee voted 18-6 in favor of the GENIUS Act.
- GENIUS Act aims to regulate U.S. stablecoins, ensuring transparency and preventing failures like TerraUSD.
- Ripple suspended the minting of RLUSD after reaching a $300M cap pending regulation.
The Senate Banking Committee on March 13, 2025, passed the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) with an 18-6, solidly bipartisan vote. The bill, officially titled the Guiding and Establishing National Innovation for U.S. Stablecoins Act, now advances to the full Senate for debate and a final vote before potential enactment.
The GENIUS Act is looking to provide for regulation of stablecoins, which are digital assets that are backed by fiat currencies such as the U.S. dollar. These coins are crucial in the cryptocurrency ecosystem, offering price stability. However, they have operated in a regulatory grey area, prompting lawmakers to push for clear and enforceable legal standards.
GENIUS Act Seeks to Prevent Future Stablecoin Collapses
Cryptocurrency journalist Eleanor Terrett shared on X that a group of U.S. senators, led by Ruben Gallego, are raising concerns about the GENIUS Act’s provisions. The joint statement they issued is critical of the revised text, advocating for increased anti-money laundering measures as well as national security safeguards within the GENIUS Act framework.
The statement also emphasizes that foreign-issued stablecoins must be defined in terms of their treatment under the law. Legislators believe that in the absence of guidelines, risks of nationalsecurity could arise. They also emphasize the necessity of having stricter punishment for noncompliance of issuers.
The collapse of TerraUSD in 2022 still echoes in regulatory circles. As an algorithmic stablecoin with not enough backing, its collapse caused ripples in the market. The GENIUS Act strives to avoid through imposing tough design requirements, public reserve transparency, as well as regulation of all stablecoin firms domiciled in the United States.
GENIUS Act Faces Potential Senate Revisions Ahead
The GENIUS Act is receiving robust support from industry leaders such as Circle, with its backing of federal regulation of stablecoins. With support from key players in the crypto industry, the bill passage seems likely. However, dissent from the group of senators could delay the final vote and alter the bill’s trajectory.
The delay in the passing of the GENIUS Act could have serious implications for stablecoin issuers. The uncertainty of the bill has already had an impact on the industry. For instance, Tether intends to launch a fresh stablecoin for users in the United States that will compete with the USD1 stablecoin.
Ripple suspended minting of the RLUSD after reaching $300 million in cap due to uncertain regulatory standards. Tether is, in its turn, launching plans for its stablecoin in the United States only. The USD1 stablecoin of WLFI also awaits its listing on centralized exchanges with its fate tied to the passing of the GENIUS Act.
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