In a decisive 68-30 vote on Tuesday evening, the Senate has overwhelmingly approved the GENIUS Act, marking a significant milestone in the regulation of the cryptocurrency industry. This bill received broad bipartisan support, with eighteen Democrats joining the majority of Republicans to facilitate its passage. The GENIUS Act is particularly notable as it is the first legislation to create a federal regulatory framework for stablecoins, which are crypto tokens pegged to the value of the US dollar.
Over the past year, the Republican Party has shown a growing enthusiasm for the crypto industry, especially after the sector contributed over $131 million to Donald Trump’s presidential campaign. This financial backing has led to a robust push from Republican senators for the passage of the GENIUS Act. However, there were two notable holdouts from the GOP: Senators Rand Paul of Kentucky and Josh Hawley of Missouri, both of whom are well-known for their critical stance towards Big Tech.
With the Senate's approval, the GENIUS Act now moves on to the House of Representatives, where lawmakers are currently drafting their own companion legislation known as the STABLE Act. The journey to this point has not been straightforward; earlier this year, in May, nine Democrats who had initially supported the GENIUS Act reversed their positions, calling for revisions to the bill's text. This shift led to a failed attempt by Senators Elizabeth Warren (D-MA) and Ron Wyden (D-WA) to block the bill from reaching a floor vote, citing concerns over recent events involving Trump family crypto ventures, including a controversial dinner aimed at holders of the memecoin $TRUMP.
Despite its eventual passage, the GENIUS Act faced significant criticism. Senator Elizabeth Warren, the ranking member of the Senate Banking Committee and a long-standing advocate for consumer protection, ultimately voted against the final version of the bill. In a speech on June 11th, she expressed concerns that the legislation lacked adequate regulatory guardrails to prevent corruption, asserting, “It would make Trump the regulator of his own financial company and, importantly, the regulator of his competitors.”
The approval of the GENIUS Act is a notable victory for the expanding digital assets industry, which has invested hundreds of millions into influencing political outcomes in Washington. The sector has hired political consultants and even some Members of Congress to advocate for its interests. In an interview leading up to Tuesday's vote, Seth Hertline, Head of Global Policy at the crypto wallet company Ledger, referred to the GENIUS Act as a potential political bellwether for the industry. He stated, “If the GENIUS Act derails, everything behind it derails,” underscoring the bill's significance for future cryptocurrency legislation.
