GENIUS Act Stablecoin Bill Could Pass This Wednesday

On Wednesday, June 11, the Senate may advance the GENIUS Act, marking a major move toward establishing clear federal stablecoin rules. This legislation seeks to create the first all-encompassing regulatory framework for the fast-developing stablecoin market. After extended debate and complex talks, momentum is building toward approval.

The Path to Senate Approval

Senate Majority Whip John Thune recently took a key procedural step by filing for cloture on Amendment #2307, a crucial bipartisan replacement for the original bill (S.1582). Cloture is a Senate process that limits prolonged debate to advance toward a final vote. Once cloture is granted, a 30-hour debate period begins, after which the Senate votes on the amendment and the overall bill.

This step is important because the GENIUS Act needs at least 60 votes to get past a filibuster and move forward. Senate sources say the final votes will likely happen on Wednesday, unless there are unexpected problems. Senators Bill Hagerty, Kirsten Gillibrand, Cynthia Lummis, and Chris Van Hollen have all worked together across party lines to help shape the bill.

Key Features of the Hagerty Amendment

Amendment #2307, often referred to as the Hagerty amendment, reshaped the bill significantly to address concerns from both the banking sector and crypto industry participants. A central feature is the tiered regulatory framework it introduces: stablecoin issuers with less than $10 billion in market value may choose to be regulated at the state level, while those above this threshold will fall under federal oversight. This approach attempts to balance innovation with necessary safeguards.

Another tenet of the amendment is transparency and consumer protection. Issuers are required to keep a 1:1 reserve that is backed by either highly liquid assets such as Treasury bills or U.S. cash. They must also provide monthly attestations and public disclosures to demonstrate ongoing solvency. Another notable provision is the ban on stablecoins that pay interest, largely a concession to traditional banks wary of competition from yield-bearing crypto products.

The amendment also addresses national security by restricting foreign-issued stablecoins without equivalent U.S. regulatory oversight. Furthermore, it bars members of the executive branch, including the president, from issuing or endorsing a national stablecoin, reinforcing Congress’s authority in this domain.

What Comes After the Senate Vote?

Assuming the Senate votes in favor of the Hagerty amendment and then the full GENIUS Act, the bill will move to the House of Representatives. There, lawmakers are working on a related measure known as the STABLE Act. While both bills share many principles, they still require reconciliation to resolve differences such as custody rules and the degree of state preemption.

If this approach results in uniform legislation, it will be a turning point for federal regulation of stablecoins, providing much-needed certainty. This would have far-reaching consequences, not only for the cryptocurrency business but also for traditional financial institutions and customers that use stablecoins for payments and other services.

It is worth noting that stablecoin regulation has remained a gray area until now, leading to uncertainty and varying state approaches. The GENIUS Act promises to fill this regulatory gap with clear rules designed to foster innovation while protecting market integrity.

Why the Act Matters?

The expected passing of the GENIUS Act is a big step forward in the control of stablecoins in the United States. It aims to establish a clear framework to stabilize and clarify the rapidly evolving market. Although the House still faces decisions before final enactment, this week’s Senate vote is a key development to watch closely.

This Act may form the foundation for upcoming regulations on digital assets, underscoring an important evolution in American financial law.