Senate passes GENIUS Act stablecoin legislation
Yesterday, the U.S. Senate achieved a significant legislative breakthrough by passing the GENIUS Act, the first stablecoin bill to clear either chamber of Congress. The bill passed with a vote of 68 to 30, mirroring a previous procedural vote. Eighteen Democrats supported the bill on both occasions, with Senator Jon Ossoff switching to a “yes” vote this time, while Senator Mark Kelly abstained.
To become law, the GENIUS Act must also pass the House of Representatives, which has its own separate STABLE Act with notable differences. However, the Senate’s approval marks a major step forward for digital asset legislation, providing much-needed regulatory certainty for the stablecoin sector.
Market Reaction and Industry Implications
The legislative momentum has already invigorated markets, exemplified by the successful IPO of stablecoin issuer Circle, whose share price reportedly soared to around $150 after an initial offering of $31. This success has sparked speculation of other major organizations, including Amazon, Walmart, and the DTCC, exploring their own stablecoin issuances, while tech giants like Apple, X, Airbnb, and Google are reportedly considering their use.
Given that approximately 97% of stablecoins are denominated in U.S. dollars, this legislative move is seen as reinforcing the dollar’s global financial dominance. Senator Lummis underscored this point, stating, “Today the Senate took a critical step toward securing U.S. Dollar dominance by passing the bipartisan GENIUS Act. The success of the GENIUS Act hinges on comprehensive market structure legislation that protects consumers, establishes transparency, and creates clearly defined trading regulations. Congress must act quickly.” Beyond stablecoins, future market infrastructure laws are expected to govern regulated crypto exchanges, custodians, and other token issuances.
Potential Hurdles and Industry Perspectives
A potential challenge could arise if the House decides to combine its stablecoin legislation (STABLE Act) with its broader market infrastructure work (CLARITY Act), which might delay progress in the Senate.
Despite this, industry leaders are optimistic about the regulatory clarity the GENIUS Act could bring. Paul Brody, blockchain lead at EY, emphasized its foundational role: “Stablecoins are the foundation that will bring consumers, investors, and enterprises on-chain. They’re not the whole story, however. Payments are just part of the commercial process – for the ecosystem to flourish we need products, services, digital assets and privacy to all scale on chain. This is the starting line, not the finish line.”
Conversely, some traditional financial institutions remain cautious. The banking sector, in particular, views stablecoins as a potential threat to their deposit base. This concern may have influenced JP Morgan’s decision to launch its JPMD deposit token on a public blockchain, coinciding with the Senate vote.
