Senate Passes Landmark GENIUS Act for Stablecoin Regulation

Washington, D.C. — The U.S. Senate approved the GENIUS Act on Tuesday, a significant piece of legislation aimed at regulating U.S. dollar-pegged stablecoins. The bill passed with a 68-30 vote and now moves to the House of Representatives for consideration.

The GENIUS Act, which stands for Guiding and Establishing National Innovation for U.S. Stablecoins Act, establishes a federal framework for stablecoins. It includes measures such as full reserve backing and monthly audits to enhance financial stability and consumer protection.

Circuit’s stock has surged following the passage, rising over 33% after news of the bill broke. “The GENIUS Act will protect consumers, enable responsible innovation, and safeguard the dominance of the U.S. dollar,” said Senator Kirsten Gillibrand, a sponsor of the bill.

Stablecoins are cryptocurrencies that maintain their value by being pegged to traditional assets like the U.S. dollar. They are increasingly popular among investors and financial institutions as the crypto market evolves. The GENIUS Act is expected to foster a regulatory environment that encourages further investment.

In a statement, Alex Thorn, head of firmwide research at Galaxy Digital, mentioned, “The bill would add substantial consumer protections, collateral requirements, and regulatory oversight.” The act is being viewed as a potential catalyst for explosive growth in the nearly $260 billion stablecoin market.

However, the bill still faces challenges in the Republican-held House. The House’s own stablecoin legislation, known as the STABLE Act, diverges from the Senate’s approach. While both bills prohibit yield-bearing consumer stablecoins, they differ on regulatory oversight, with the Senate version centralizing authority within the Treasury.

Investors are optimistic about the potential impact of these regulations. Faryar Shirzad, Circle‘s Chief Policy Officer, expressed hope that the GENIUS Act would inspire a wave of investment across the stablecoin sector, stating, “All the investment dollars that are sitting out there ready to build the next generation of the financial system will be put to work.”

As the legislation awaits further action in the House, the implications of the GENIUS Act could reshape the landscape for cryptocurrencies in the United States.