The US Senate has passed a bill to create a regulatory framework for stablecoins, a type of cryptocurrency tied to the US dollar.

The legislation, known as the GENIUS Act, received bipartisan support with a 68-30 vote on June 17, 2025.

The bill requires stablecoins to be backed by liquid assets and mandates monthly reserve disclosures.

It now moves to the House, with the Trump administration targeting implementation by August 2025.

Critics, including advocacy groups, warn of financial and anti-money laundering risks.

Some Democrats and state regulators want revisions, especially around bank oversight and consumer protection.

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🔗 Source: Reuters

🧠 Food for thought

1️⃣ Global regulatory race shows US playing catch-up despite market dominance

The GENIUS Act represents a significant shift in the US regulatory approach to stablecoins, coming after many other nations have already established frameworks.

By 2023, 25 out of 43 analyzed countries had already implemented stablecoin regulations, including Austria, France, Germany, and Japan, while the US was still developing its approach 1.

This regulatory gap is particularly notable given that US-based stablecoins dominate the global market, with Tether’s market capitalization exceeding $141.4 billion and USD Coin growing by 48% to $52.5 billion 2.

The legislation arrives as global stablecoin adoption accelerates, with the Atlantic Council finding weak correlation between regulatory restrictiveness and actual crypto usage, suggesting that market forces have outpaced regulatory frameworks 3.

This pattern of delayed but comprehensive regulation reflects previous US approaches to emerging financial technologies, where regulators often take a measured approach while the market develops.

2️⃣ Stablecoins serve critical functions in emerging markets beyond speculation

While much crypto discussion focuses on investment and speculation, stablecoins have found genuine utility in emerging economies facing currency instability and limited banking access.

India, Nigeria, and Indonesia are leading stablecoin adoption specifically for retail transactions and as protection against local currency devaluation, demonstrating practical applications beyond crypto trading 2.

This utility explains why stablecoin transaction volumes have grown even during broader crypto market downturns, with cross-border payments and inflation hedging driving adoption in regions with unstable currencies 2.

Unlike more volatile cryptocurrencies, stablecoins address practical financial needs by combining blockchain efficiency with value stability, making them particularly valuable in economies where the US dollar is already used informally as a store of value.

3️⃣ Unusual political coalitions forming around digital asset regulation

The GENIUS Act’s bipartisan support (passing 68-30) reveals shifting political dynamics around cryptocurrency regulation that break traditional partisan alignments.

Several Democrats joined most Republicans to back the bill despite concerns from progressive senators like Elizabeth Warren, who argued it could undermine “national security, financial stability, and consumer protection” 4.

This political realignment follows significant industry lobbying, with the crypto sector spending over $119 million backing pro-crypto congressional candidates in recent elections to frame digital asset regulation as a bipartisan issue [original article].

Institutional tensions are also evident between federal and state regulators, with the Conference of State Bank Supervisors expressing concern about the “dramatic and unsupported expansion” of federal authority over money transmission activities [original article].

The coalition supporting stablecoin regulation demonstrates how emerging technologies can reshape political alignments around financial policy, creating new alliances as both parties reconsider traditional positions on financial regulation.

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