The GENIUS Act: A Game-Changer for US Stablecoins
The Senate recently approved the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act in a decisive 51-23 vote on June 17, paving the way for the measure to be considered by the House. This milestone followed a 68-30 cloture decision on June 11, which brought an end to debates and initiated a 30-hour countdown to the final roll call.
Senator Bill Hagerty (R-Tenn.), the primary sponsor of the bill, hailed the Senate’s decision as a significant victory for the United States. In a statement posted on social media, he described GENIUS as a groundbreaking regulatory framework for payment stablecoins that will bolster the country’s economic growth.
Hagerty emphasized that the bill’s requirement to peg stablecoins one-for-one to cash or short-term Treasuries combines the stability of the dollar with the speed of blockchain technology, enabling rapid settlement for businesses and individuals. He predicted that stablecoin issuers could potentially become the largest holders of Treasuries globally by 2030, enhancing fiscal resilience.
Under the provisions of the GENIUS Act, every payment stablecoin must maintain reserves equal to the number of tokens in circulation, backed by short-dated US Treasuries or insured deposits. Issuers are prohibited from offering yields on these stablecoins, and reserves must be kept in segregated accounts separate from operating capital. Additionally, issuers must adhere to Bank Secrecy Act compliance programs, conduct customer due diligence checks, and report any suspicious activity.
Entities with liabilities exceeding $10 billion will be required to obtain a federal charter, while smaller issuers could operate under state regimes that meet federal standards, subject to joint examinations by federal regulators. The Treasury Department will be tasked with publishing quarterly audit templates, and the Commodity Futures Trading Commission (CFTC) will be granted limited enforcement powers in the spot market.
Treasury Secretary Scott Bessent believes that the reserve mandate outlined in the GENIUS Act could attract private demand towards Treasury bills, lower borrowing costs, and introduce millions of users worldwide to dollar-denominated digital asset rails.
With the Senate’s approval secured, the GENIUS Act now awaits its scheduling in the House for further consideration and potential enactment into law. This development marks a significant step towards establishing a robust regulatory framework for stablecoins in the United States, with the aim of fostering innovation and ensuring the country’s leadership in the digital asset space.