In a pivotal late-night session, U.S. senators rallied to advance the first major federal framework for stablecoins, digital currencies tied to traditional assets. Overcoming a prior stalemate, lawmakers cleared a critical procedural hurdle Monday, setting the stage for final approval. The move signals growing bipartisan urgency to rein in crypto’s wild west while fostering innovation.
Advances Landmark Crypto Bill
Sixty-six senators voted Monday to fast-track the GENIUS Act, a bill years in the making. The 66-32 tally smashed the 60-vote threshold needed to limit debate, marking a sharp reversal from May 8, when the measure collapsed amid partisan gridlock. This time, 16 Democrats joined Republicans to propel the legislation forward, despite lingering concerns about oversight gaps. The breakthrough followed last-minute negotiations softening language on consumer protections. Furthermore, the House races to finalise its competing STABLE Act, leading up to a potential clash between chambers. If reconciled, the law would establish America’s first comprehensive rules for stablecoins, a $230 billion market dominated by offshore players like Tether.
What the GENIUS Act Demands
The 89-page bill mandates strict safeguards for stablecoin issuers. Companies must hold dollar-for-dollar reserves in cash or short-term Treasuries, preventing Terra-LUNA-style collapses. Algorithmic stablecoins face outright bans, and public officials, including Congress members, cannot launch such tokens while in office. Large issuers (over $10 billion) face Federal Reserve oversight, while smaller firms can opt for state licensing. However, critics highlight loopholes: foreign operators like Tether avoid stringent audits, and private firms like Elon Musk’s X could still issue coins. “This isn’t perfect, but it’s progress,” argued Senator Cynthia Lummis (R-WY), a key sponsor.
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Bipartisan Deal
Monday’s success hinged on fragile compromises. Earlier this month, Democrats Mark Warner (D-VA) and Ruben Gallego (D-AZ) opposed the bill, fearing weak consumer shields and ties to Donald Trump’s crypto venture, World Liberty Financial. After negotiators added minor protections, including the public official ban, both flipped their votes. Republicans also conceded ground. Initially resisting federal oversight for small issuers, they allowed a waiver system for state-regulated firms. “We found common ground without gutting the core,” said Senator Kirsten Gillibrand (D-NY), a co-sponsor. Despite the kumbaya moment, Elizabeth Warren (D-MA) blasted the bill as a “gift to crypto scammers.”
Critics Warn of Unchecked Risks
Skeptics argue the GENIUS Act ignores glaring threats. While banning algorithmic stablecoins, it does little to curb offshore issuers, a flaw Warren calls “dangerous.” Others fear the bill enables conflicts of interest. Though it bars sitting officials from launching stablecoins, Trump’s existing USD1 token remains untouched. Consumer advocates also slam loopholes letting tech giants like Amazon issue stablecoins if they stay private. “This invites Big Tech into finance without guardrails,” warned Dennis Kelleher of Better Markets. Furthermore, banks worry deposits could flee to higher-yield stablecoins, destabilising traditional finance.
Next Steps
The Senate will debate amendments this week, with a final vote likely after Memorial Day. Passage seems probable given Monday’s margin. Attention then shifts to the House, where the STABLE Act imposes tougher federal oversight but aligns on core goals. Reconciling both bills could take months, though GOP leaders aim to send a final version to Trump by July. The president, a crypto enthusiast, is expected to sign it, boosting his campaign pledge to cement U.S. digital finance leadership. As global rivals like the EU finalise their rules, America’s crypto future now hinges on swift, unified action.
Written By Fazal Ul Vahab C H
