The US Senate has passed the GENIUS Act, a landmark legislation that permits banks to issue stablecoins and places stablecoin regulation under federal oversight. Advocated by Senators Lummis and Gillibrand, the Act aims to revolutionize the $3.3 trillion cryptocurrency market by fostering institutional adoption and improving market liquidity.
Key industry leaders including Mike Novogratz, CEO of Galaxy Digital, have welcomed the new regulation as a significant boost for the crypto sector. The law is expected to enhance liquidity particularly for Bitcoin and Ethereum, stabilizing these markets and encouraging new institutional inflows.
The GENIUS Act builds upon prior regulatory clarity such as the 2020 OCC guidelines, reinforcing support for crypto custodial services and anticipated growth in stablecoin issuance and decentralized finance (DeFi) activity. The bill has sparked projections from Bitwise’s CIO of a potential crypto market surge to $2.5 trillion driven by this regulatory support.
Meanwhile, the bill is undergoing a formal debate phase including proposed amendments ranging from ethics regulations tied to crypto-linked families, bans on Central Bank Digital Currency (CBDC), to anti-money laundering provisions. One major amendment includes the Credit Card Competition Act (CCCA), which could affect credit card market competition but faces opposition from some senators and the American Bankers Association.
The final passage of the GENIUS Act and its definitive impact hinge on ongoing negotiations and votes in the coming days, but industry stakeholders emphasize its potential to bring a legal foundation stabilizing and propelling the crypto ecosystem forward.