In a landmark moment for the crypto world, the U.S. Senate has advanced the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025, commonly known as the GENIUS Act, by voting 66-32 to close out the bill and vote on it one last time. The bill aims to provide the desperately needed regulatory clarity for stablecoins in the United States.

Banking Oversight Over SEC Control

First introduced by Senator Bill Hagerty in February 2025, the GENIUS Act establishes a national regulatory system for payment stablecoins. The widely popular tokens that are widely used on the global crypto markets because they do not fluctuate in price would no longer be regulated by either the Securities and Exchange Commission (SEC). Or the Commodity Futures Trading Commission (CFTC). Instead, they would be classified as payment instruments and overseen by banking regulators.

Key provisions of the legislation are the restriction of stablecoin issuance to insured banks, institutions under the jurisdiction of the Office of the Comptroller of the Currency (OCC), state-licensed institutions that are subject to similar federal standards. The law would establish a two-tiered regulatory system: issuers under $10 billion in market capitalization could operate under state-regimes, and larger issuers would need to be under direct federal oversight.

Notably, the bill imposes rigorous anti-money laundering (AML) provisions, criminalization of reserve misrepresentation, and a bankruptcy regime with priority accorded to holders of stablecoins. The bill also short-term prohibits algorithmic stablecoins subject to further risk assessment by the U.S. Treasury.

The law similarly asserts American leadership in the domestic stablecoin market by requiring overseas issuers to either adhere to American regulatory norms or issue in regimes with which the U.S.Treasury is familiar. Failure can be punishable by up to $1 million per infraction and possible exclusion from U.S. markets.

Though the bill is a giant step towards mainstream adoption and regulatory acceptance of stablecoins, opponents argue it’s deficient in enforcement against foreign actors and can exclude smaller startup innovation with overly burdensome compliance fees.

As the GENIUS Act advances toward a Senate final vote, it could usher in a new age of regulation of digital assets—finding balance between regulation and innovation in one of the world’s largest crypto markets.

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