The GENIUS Act is expected to pass through the Senate, marking a historic breakthrough in stablecoin regulation.

Original | Odaily Daily Report (@OdailyChina)

Author｜Azuma（@azuma_eth）

On the morning of May 20, Beijing time, the highly anticipated stablecoin regulation bill (GENIUS Act) achieved a key breakthrough in a vote in the U.S. Senate — the Senate passed the cloture vote on the GENIUS Act with a result of 66 votes in favor and 32 votes against. This means the Senate has agreed to stop debating the bill and will hold a final vote no later than 30 hours from now.

Has the final vote been completed?

It is important to emphasize that multiple media outlets and KOLs reported inaccurately on the latest progress of the GENIUS Act this morning; in fact, the Senate only voted to end the debate, and the bill itself has not yet passed the final vote.

However, this can still be seen as a key breakthrough for the GENIUS Act in terms of breaking through Congress, because the termination of debate voting is a critical mechanism in the legislative process of the U.S. Congress, specifically designed to break the deadlock where the minority party with opposing views hopes to obstruct the vote on a bill through "endless debate."

In the case of the GENIUS Act, Democratic Senator Elizabeth Warren and others have always been the main force obstructing the progress of the GENIUS Act. It was precisely due to the collective opposition of Democratic Senators that the GENIUS Act failed to advance further in the Senate vote on May 8, receiving only 49 votes (not meeting the minimum requirement of 60 votes). However, in this morning's vote to terminate the debate, 15 Democratic Senators, including Adam Schiff and Mark Warner, changed their votes from no to yes — this indicates that in the upcoming final vote, these Democratic Senators are likely to become the key force for the GENIUS Act to pass the Senate.

• Odaily Note: According to reports from NBC, the reason for the vote changes by several Democratic senators is that both parties reached an agreement through negotiations last week, in exchange, the bill added some amendments, including changes to consumer protection measures and restrictions on tech companies issuing stablecoins, and expanded ethical standards to include special government employees — this will temporarily apply to Musk and David Sacks.

GENIUS Act Content

On February 4, 2025, U.S. Senators Bill Hagerty, Tim Scott, Kirsten Gillibrand, and Cynthia Lummis jointly proposed the "Guiding and Establishing National Innovation for US Stablecoins (GENIUS Act)," aimed at establishing a legal framework for the legal use of stablecoin payments within the United States.

The core provisions of the bill are as follows.

• Definition of Stablecoin: A digital asset anchored to a fixed currency value, fully backed by USD or other highly liquid assets at a 1:1 ratio, specifically used for payment settlement scenarios.
• Dual License Regulation: Federal regulation, issuers with a market cap over $10 billion must comply with federal regulation; state-level regulation, small issuers can choose state registration (must meet federal equivalence standards).
• 100% Reserve Requirement: Reserve assets are limited to cash, short-term U.S. Treasury bonds, or central bank deposits, and must be isolated from operating funds. A proof of sufficient reserves must be submitted monthly to ensure users can redeem at par value.
• Mandatory Disclosure of Transparency: Regularly disclose the composition of reserves and redemption policies, subject to compliance audits by certified public accounting firms.
• Anti-Money Laundering Compliance: Subjecting issuers to the jurisdiction of the Bank Secrecy Act and fulfilling AML obligations at the financial institution level.
• Prioritize User Protection: In the event of a publisher's bankruptcy, stablecoin holders' claims take precedence over other claimants.
• Clear Regulatory Authority: It is clearly stated that payment stablecoins do not fall under the categories of securities, commodities, or investment companies, delineating the regulatory boundaries.

In short, as the first federal-level stablecoin legislation, the GENIUS Act has been widely regarded by the industry as an important advancement for stablecoins to move out of the stage of rampant growth and officially enter the realm of compliance, with the expectation of advancing towards broader markets such as payments.

It is precisely because of the importance of the GENIUS Act that various parties in the industry have invested considerable lobbying efforts in the hope that the bill can navigate the legislative process and be successfully implemented soon.

What's next after the Senate?

According to the U.S. legislative process, if the GENIUS Act can successfully pass the Senate, it will still need to go through a vote in the House of Representatives, and then it will be submitted to President Trump for signing, before it finally becomes law.

According to reports from Barron's, it is expected that the bill will be reviewed more smoothly in the House of Representatives, as the House does not require an absolute majority vote for approval.

How is the market responding?

Perhaps due to the favorable boost from the key breakthrough achieved by the GENIUS Act in the Senate, the cryptocurrency market, which faced a significant correction yesterday, has welcomed a strong rebound today — BTC has once again crossed the $106,000 mark, with new highs seemingly just around the corner.

Looking ahead to the market changes after the implementation of the GENIUS Act, as the first step for stablecoins towards compliance and a broader market, this bill is undoubtedly a huge boon for the entire industry, especially for projects closely related to stablecoins, which stand to benefit greatly — for instance, entering Aave (AAVE), Pendle (PENDLE), and Frax (FRAX) has shown significantly greater gains than the overall market performance; moreover, Ethereum (ETH), as the current main battleground for compliant stablecoin issuance, may also capture larger capital inflows.

In the stablecoin market, the GENIUS Act, which clearly requires dual licensing and regulation from both federal and state levels, may become an opportunity for a major reshuffle in the industry. Circle (USDC), which has long adhered to a compliant route and is registered in the United States, as well as the Trump family project WLFI (USD 1), may receive stronger compliance endorsements. However, the current king of the stablecoin market, Tether (USDT), may face significant regulatory challenges due to issues such as overseas registration and questionable transparency. As a response, Tether has officially announced plans to launch a new stablecoin in the United States, and Tether is also actively lobbying in Washington to promote more favorable policies.

However, these are all discussions for the final implementation of the GENIUS Act. As for now, the top priority facing this bill will be the final Senate vote that will take place within 30 hours at most, and at that time, Odaily will promptly follow up on the voting results.