The U.S. Senate on Tuesday passed a bill to create a regulatory framework for U.S.-dollar-pegged cryptocurrency tokens known as stablecoins, in a watershed moment for the digital asset industry.
The bill, dubbed the GENIUS Act, received bipartisan support, with several Democrats joining most Republicans to back the proposed federal rules. It passed 68-30. The House of Representatives, which is controlled by Republicans, needs to pass its version of the bill before it heads to President Donald Trump's desk for approval.
"It is a major milestone," said Andrew Olmem, a managing partner at law firm Mayer Brown and the former deputy director of the National Economic Council during Trump's first term.
"It establishes, for the first time, a regulatory regime for stablecoins, a rapidly developing financial product and industry."
Stablecoins, a type of cryptocurrency designed to maintain a constant value, usually a 1:1 dollar peg, are commonly used by crypto traders to move funds between tokens. Their use has grown rapidly in recent years, and proponents say that they could be used to send payments instantly.
If signed into law, the stablecoin bill would require tokens to be backed by liquid assets - such as U.S. dollars and short-term Treasury bills - and for issuers to publicly disclose the composition of their reserves on a monthly basis.
The crypto industry has long pushed for lawmakers to pass legislation creating rules for digital assets, arguing that a clear framework could enable stablecoins to become more widely used. The sector spent more than $119 million backing pro-crypto congressional candidates in last year's elections and had tried to paint the issue as bipartisan.
The House of Representatives passed a stablecoin bill last year but the Senate - in which Democrats held the majority at the time - did not take that bill up, and it died.
Trump has sought to broadly overhaul U.S. cryptocurrency policies after courting cash from the industry during his presidential campaign.
Bo Hines, who leads Trump's Council of Advisers on Digital Assets, has said the White House wants a stablecoin bill passed before August.
Tensions on Capitol Hill over Trump's various crypto ventures at one point threatened to derail the digital asset sector's hope of legislation this year as Democrats have grown increasingly frustrated with Trump and his family members promoting their personal crypto projects.
“In advancing these bills, lawmakers forfeited their opportunity to confront Trump’s crypto grift – the largest, most flagrant corruption in presidential history,” said Bartlett Naylor, financial policy advocate for Public Citizen, a consumer rights advocacy group.
Trump's crypto ventures include a meme coin called $TRUMP, launched in January, and a business called World Liberty Financial, a crypto company owned partly by the president.
The White House has said there are no conflicts of interest present for Trump and that his assets are in a trust managed by his children.
Other Democrats expressed concern that the bill would not prevent big tech companies from issuing their own private stablecoins, and argued that legislation needed stronger anti-money laundering protections and prohibitions on foreign stablecoin issuers.
"A bill that turbocharges the stablecoin market, while facilitating the president’s corruption and undermining national security, financial stability, and consumer protection is worse than no bill at all," said Senator Elizabeth Warren, a Democrat, in remarks on the Senate floor in May.
The bill could face further changes in the House of Representatives. In a statement, the Conference of State Bank Supervisors called for “critical changes” to mitigate financial stability risks.
“CSBS remains concerned with the dramatic and unsupported expansion of the authority of uninsured banks to conduct money transmission or custody activities nationwide without the approval or oversight of host state supervisors,” said Brandon Milhorn, president and CEO of the Conference of State Bank Supervisors, in a statement.
