Senate Advances GENIUS Act To Regulate Stablecoins

On May 19, 2025, the proposed Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025 (the “GENIUS Act”), cleared a major procedural hurdle when the Senate voted 66-32 to advance it two weeks after it was blocked.   

The bill, introduced by Senator Bill Hagerty of Tennessee, sets up a regime to regulate stablecoins.  Stablecoins are a form of digital currency backed by other, more stable types of currency, like the U.S. dollar or gold.  As reported by ABC News, the bill sets rules for those who issue stablecoins, including a requirement that firms hold a reserve of assets underlying the cryptocurrency.  It would also require issuers to grant stablecoin holders repayment priority in bankruptcy, and sets forth anti-money laundering and anti-terrorism measures.

The bill initially stalled on May 8, 2025 when Senate Democrats and two Republicans united to block it from reaching the 60 votes needed to advance to final passage in the Senate.  According to NBC News, the support needed to proceed with the bill came after a group of bipartisan negotiators reached an agreement on an amendment that includes new changes to consumer protection safeguards, limits on tech companies issuing stablecoins, and extending ethics standards to special government employees. 

The bill’s proponents claim that it helps protect consumers and sets industry standards, while critics warn that it is too industry-friendly and fails to adequately protect consumers and prevent illicit trading of stablecoins. 

Senate Majority Leader John Thune plans to allow floor amendments before a final vote on the bill, and several Senators have expressed their intention to continue negotiating its provisions on the floor.   If passed, it will proceed to the House.