The U.S. Senate has moved closer to passing a historic stablecoin regulation bill. On the evening of May 20, lawmakers voted 66 to 32 in favor of advancing the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins), clearing the way for further debate and voting on amendments.
The Vote and Political Background
The initiative received support from several Democrats, including Senators Ruben Gallego, Catherine Cortez Masto, John Fetterman, Mark Warner, Maggie Hassan, and Adam Schiff. Opposing the bill were Chuck Schumer, Dick Durbin, Elizabeth Warren, Amy Klobuchar, Andy Kim, and others.
Some Democrats had previously criticized the bill due to concerns about foreign issuers, anti-money laundering standards, the potential issuance of stablecoins by large corporations, and Donald Trump’s ties to crypto projects.
For example, Elizabeth Warren claimed that the GENIUS Act “will accelerate Trump’s corruption by boosting the scale and profitability of USD1,” referring to the recently launched stablecoin by World Liberty Financial.
However, after negotiations with major tech companies and the addition of provisions on consumer protection and conflict of interest rules, part of the Democratic faction changed their stance.
Key Provisions of the GENIUS Act:
- Stablecoins must be fully backed by U.S. dollars or equivalent liquid assets;
- Issuers with market capitalizations above $50 billion must undergo annual audits;
- Requirements are introduced for foreign stablecoin issuers;
- If passed, the U.S. will become the first major economy with comprehensive federal regulation for stablecoins.
The bill will now proceed to further discussion.
Changes in SEC’s Position: Chair’s Address
Amid legislative activity, the U.S. Securities and Exchange Commission (SEC) also clarified its position. The new SEC Chair, Paul Atkins, delivered a keynote speech at the SEC Speaks conference, announcing the start of a policy shift in its approach to the crypto industry.
- The SEC will no longer ignore innovation or continue the policy of “regulation by enforcement”;
- SEC divisions will be instructed to conduct transparent consultations with market participants;
- Plans are underway to allow registered broker-dealers to trade both securities and non-securities, including crypto assets, simultaneously;
- The SEC has requested that Congress reorganize FinHub — the SEC’s strategic innovation hub — by integrating its functions into other departments;
- For the first time since 2002, the SEC will revisit restrictions on investors in closed-end funds, potentially expanding access to hedge funds and private equity;
- A review has been announced of the costs and data collection scope of the CAT (Consolidated Audit Trail) system, whose annual cost has grown to $250 million.
SEC Commissioner Hester Peirce endorsed the new direction, adding that:
- Cryptocurrency is not the SEC’s top priority, but current practices need revision;
- Most crypto assets do not fall under the definition of securities;
- Memecoins, NFTs, and stablecoins that do not convey economic rights are not securities;
- Tokenized real-world assets (RWAs) still qualify as securities;
- No laws prohibit brokers from trading both securities and non-securities within an ATS (Alternative Trading System).
What’s Next
A comprehensive digital asset bill is also under discussion in the U.S. Congress. This legislation would define the powers of the SEC and the CFTC and introduce mechanisms for registering digital commodity platforms. Some senators propose merging stablecoin regulation and broader market reform into a single legislative act. Together, these initiatives could mark a turning point for the entire crypto market.
Previously: Forex Industry Pushes Back on Stablecoin Regulation to Protect Revenues
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