The U.S. Senate recently made history by passing the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act (S. 394) with a decisive vote of 68-30. This groundbreaking legislation marks the first comprehensive federal framework for fiat-backed stablecoins in the United States.
Introduced by Senator Bill Hagerty and co-sponsored by Senators Tim Scott, Kirsten Gillibrand, and Cynthia Lummis, the GENIUS Act aims to provide a regulated space for stablecoins, ensuring transparency, accountability, and consumer protection. Under the official title “Guiding and Establishing National Innovation for U.S. Stablecoins of 2025,” the bipartisan bill received widespread support from both sides of the aisle.
The GENIUS Act imposes strict regulations on payment stablecoins, including the requirement for 1:1 dollar-backed reserves, monthly disclosures, audits, and clear federal or state licensing. It also prohibits algorithmic coins and sets limitations on rehypothecation and commingling of reserves. Furthermore, the bill clarifies that compliant stablecoins are not considered securities, thus freeing them from SEC jurisdiction.
While the focus of the GENIUS Act is on stablecoins, proponents of Bitcoin view this legislation as a significant win. Stablecoins serve as vital bridges into the world of Bitcoin, facilitating easier transactions, settlements, and institutional participation. By legitimizing stablecoin infrastructure, the U.S. is indirectly strengthening the foundation on which Bitcoin operates.
As the financial landscape evolves, trusted access points like dollar-backed tokens could play a crucial role in onboarding new Bitcoin users, particularly in international markets and corporate treasuries. President Donald Trump’s AI & Crypto Czar, David Sacks, praised the passage of the GENIUS Act for providing regulatory clarity, enhancing consumer protection, and solidifying the dominance of the U.S. dollar online.
The approval of the GENIUS Act signals a clear commitment from the U.S. to embrace the future of stablecoins and Bitcoin. With this landmark legislation in place, the country is poised to lead the way in the digital finance sector, paving the path for a more secure and innovative financial ecosystem.