The US Senate has cleared the way for the GENIUS Act, the first federal effort to regulate stablecoins, with 16 Democrats joining Republicans in supporting the bill. This move comes after a significant influence-purchasing campaign by crypto companies and is seen as a major victory for the industry.
Stablecoins are cryptocurrency coins that have their value pegged at 1-to-1 with another currency or asset, most commonly the US dollar. The GENIUS Act aims to regulate these stablecoins, requiring crypto companies to hold liquid reserves to ensure customers can withdraw their funds easily. In the event of a company’s bankruptcy, it would give stablecoin holders priority over other claims.
The bill also includes money laundering rules and was seen as a way for Trump to increase his wealth through his crypto ventures. However, Democrats who oppose the bill argue that it gives too much power to the industry and doesn’t address concerns about Trump’s self-dealing in crypto.
Despite opposition from some Democrats, including Senator Elizabeth Warren, enough votes were secured to keep the bill moving forward. The passage of the GENIUS Act is seen as a significant step towards governing the massive and often unregulated crypto industry. However, critics argue that it will also reward an industry that has heavily influenced politicians and grant Trump another enormous score.
The bill’s provisions are expected to benefit the crypto industry, particularly stablecoin holders, who would now have a better chance of getting their funds back in the event of a company’s bankruptcy. The passage of the GENIUS Act is seen as a major victory for the industry and a significant moment in the ongoing battle between regulation and self-interest in the world of cryptocurrency.
Source: https://slate.com/technology/2025/05/cryptocurrency-democrats-trump-industry-genius-act-stablecoin-bill.html