Senate Set to Pass GENIUS Act Regulating Stablecoins

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Senate Set to Pass GENIUS Act Regulating Stablecoins

The U.S. Senate is expected to approve the GENIUS Act today—a landmark bipartisan bill establishing the first comprehensive stablecoin framework. It includes consumer protections and bans members of Congress (but notably not the President) from profiting from stablecoins. While praised by industry leaders like Coinbase’s CEO and the Treasury Secretary, critics—such as Sen. Elizabeth Warren—warn the bill creates a "super highway" for presidential conflicts of interest

Sultan Sikander

June 17, 2025

5Min Reads

Senate Set to Pass GENIUS Act Regulating Stablecoins

Cryptocurrency

📜 Introduction

In a groundbreaking move poised to reshape the cryptocurrency landscape, the U.S. Senate is expected to pass the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) today, June 17, 2025. This historic legislation marks the first serious federal attempt to regulate stablecoins—a rapidly growing digital financial tool pegged to fiat currencies such as the U.S. dollar.

The bill aims to create a comprehensive, nationwide framework that governs the issuance, operation, and oversight of stablecoins. But while celebrated by industry leaders and many lawmakers, the GENIUS Act has ignited fierce debate due to its notable omissions, particularly in addressing potential conflicts of interest within the highest levels of government.

⚖️ What Is the GENIUS Act?

The GENIUS Act is not just another crypto bill—it is a sweeping piece of legislation that:

Establishes federal licensing for stablecoin issuers

Requires high-quality reserve assets to back all issued coins

Imposes mandatory audits and real-time reporting to financial regulators

Introduces anti–money laundering (AML) and know-your-customer (KYC) provisions

Allows certain state-chartered institutions to operate across state lines under federal preemption

Bans members of Congress and their families from profiting via stablecoin investments—but controversially excludes the President and presidential family members

📅 Timeline of the Bill

Introduced in early 2025 following multiple stablecoin scandals and market volatility

Passed out of the Senate Banking Committee in April

Bipartisan negotiations continued through May to close legal loopholes

Senate invoked cloture in early June, moving the bill toward a final vote

June 17: Expected passage on the Senate floor

🧩 Core Provisions in Detail

🔒 Consumer Protections

Stablecoin issuers must maintain 100% reserves in U.S. Treasury securities or equivalent assets

Must submit to third-party monthly audits

Must disclose real-time reserve data

Violations may result in heavy penalties, revocation of license, and criminal charges

🏦 Chartering and Licensing

Creates a national standard for stablecoin issuers

Allows Special Purpose Depository Institutions (SPDIs) to operate federally if compliant

Removes state-level veto rights in cases of federally-licensed SPDIs

🚫 Political Conflict Provisions

Bars members of Congress and their immediate families from owning or trading stablecoins regulated under this Act

Does not extend these prohibitions to the President or presidential family—raising red flags among ethics watchdogs and political opponents

📈 Industry Reactions

The crypto world has responded largely positively to the GENIUS Act. Industry leaders see it as a long-overdue framework that will provide legitimacy and attract more institutional capital.

The CEO of a leading exchange hailed the bill as a “historic day for crypto legitimacy.”

Financial analysts forecast that regulated stablecoins could surpass $2 trillion in market cap by 2028 under the GENIUS framework

Major tech companies including e-commerce giants and digital wallet providers have reportedly paused pilot programs, waiting for this legal clarity

Circle’s recent IPO success and crypto firms aligning with new regulatory protocols reflect rising investor confidence.

🧨 Controversies and Criticism

1. Presidential Exclusion

Perhaps the most criticized element of the GENIUS Act is what it doesn’t do. While members of Congress face strict new ethical standards, the President and immediate family are exempt from restrictions on holding or profiting from stablecoins. Critics have labeled this a “giant loophole” and an “open door for executive corruption.”

One senior Senator decried the move, stating:

\You cannot pass a financial integrity bill and leave out the most powerful figure in the nation.\

This has sparked new calls for an independent Presidential Ethics Commission to be created.

2. Banking Loopholes

The GENIUS Act allows SPDIs—institutions chartered in states like Wyoming—to issue stablecoins nationwide. Critics argue this undercuts the power of individual states to protect consumers and regulate risky financial instruments. Some financial watchdogs warn that this could recreate a shadow banking sector under the guise of fintech.

3. Market Stability Concerns

Economists warn that mass adoption of stablecoins could lead to significant outflows from traditional banking deposits. If enough consumers convert dollars into stablecoins, banks might find themselves unable to lend at previous levels, threatening credit availability and overall financial system stability.

🧮 Stats & Impact Forecast

There are currently over $207 billion in active U.S.-pegged stablecoins in circulation

By 2027, stablecoin transaction volume is projected to exceed $14 trillion annually

62% of Fortune 500 companies are exploring stablecoin-based payment systems

In the past 12 months, over 8 million new stablecoin wallets have been created in the U.S. alone

📌 Big Tech & Stablecoin Alignment

The bill includes provisions aimed at preventing big tech firms like Amazon, Meta, and Walmart from directly issuing stablecoins. Instead, they are encouraged to partner with federally approved institutions. This balances innovation with regulation, although critics warn that indirect influence remains a risk.

🔍 What's Next?

If the bill passes the Senate today as expected, it will head to the House of Representatives. There, lawmakers may:

Introduce amendments to expand ethics provisions

Strengthen regulatory oversight on SPDIs

Merge elements of the CLARITY Act (focused on crypto market structure) and the STABLE Act (focused on reserve transparency)

The goal is to send a final unified bill to the President’s desk before the August recess.

💬 Expert Insights

Policy experts, law professors, and financial regulators are divided:

Some call it visionary—a solid foundation for digital money in a connected age.

Others call it dangerous—a fast pass to systemic financial risk without adequate enforcement.

One former regulator summarized:

\This bill is a rocket with two engines: one is regulation, the other is politics. If either fails, it could blow up.\