The U.S. Senate is preparing for a cloture vote on the bipartisan GENIUS Act, a stablecoin regulation bill aimed at creating the country's first comprehensive federal framework for stablecoins. Spearheaded by Senator John Thune, the legislation intends to introduce differentiated regulatory oversight whereby stablecoin issuers with market capitalization under $10 billion would be governed at the state level, while larger issuers would fall under federal supervision.
The bill has been substantially reshaped by Amendment #2307, a compromise that balances interests between traditional banking and digital asset firms. Key provisions include mandatory 1:1 backing of stablecoins with U.S. dollars or highly liquid assets, monthly attestations and disclosures for consumer protection, a ban on interest-yielding stablecoins to limit competition with bank deposits, and restrictions on foreign stablecoins without equivalent oversight to mitigate national security risks.
The cloture vote, requiring 60 votes to proceed, is expected to occur by midweek, setting in motion a final Senate vote. If passed, the legislation will advance to the House, which is concurrently developing the STABLE Act. Both bills will have to be reconciled before being sent to the president. The GENIUS Act is anticipated to reform the legal landscape around stablecoins such as USDT and USDC, with potential implications for on-chain liquidity and platforms like Ethereum that facilitate stablecoin settlements.
Notably, no prominent crypto leaders or regulatory bodies have publicly commented on the bill's recent developments. The outcome of this legislation holds significant weight for the stablecoin market and the broader digital asset ecosystem in the United States.