New Era of Stablecoin Regulation: The Twists and Turns of the GENIUS Act

From May to June 2025, the U.S. Senate engaged in a fierce battle over the "GENIUS Act." This bill, aimed at establishing the first federal regulatory framework for the $250 billion stablecoin market, underwent a dramatic turnaround from near failure to bipartisan compromise, ultimately entering the full debate phase with a vote result of 68 to 30. This process highlights the complex interplay of political and financial interests.

Bill Progress Timeline

• March 2025: Republican senators propose a draft bill aimed at establishing a "federal + state" dual regulatory system.
• May 8: The first procedural vote failed 48:49, with the Democratic Party opposing collectively.
• May 15: The two parties held urgent consultations and introduced a revised version of the bill.
• May 20: The amendment passed the key "motion to terminate debate" by a vote of 66 to 32.
• June 11: The Senate passed the bill with a vote of 68 to 30, entering the final debate and amendment process.

The Republican Party has packaged the bill as a strategic tool for "digital dollar hegemony," while the Democratic Party's stance has softened due to concerns that a regulatory vacuum could lead to financial risks. Senate Majority Leader John Thune's remarks are highly provocative: "If the U.S. does not dominate stablecoin rules, China will fill the void with its digital yuan!"

Core Provisions of the Bill

1. Dual regulation and issuance threshold: Over $10 billion is regulated by the federal government, while below $10 billion can opt for state-level regulation.

2. 1:1 Reserve and Asset Isolation: Requires full collateralization with highly liquid assets, and reserves must be strictly isolated from operational funds.

3. Restrictions on Tech Giants: Non-financial tech companies must undergo special scrutiny to issue stablecoins.

4. Consumer Protection: Holders of stablecoins can redeem their assets preferentially in the event of the issuer's bankruptcy.

5. Anti-Money Laundering and Transparency: Bring stablecoin issuers under the jurisdiction of the Bank Secrecy Act.

6. Special Clause: There is no explicit prohibition against members of Congress or relatives of the President participating in stablecoin business.

Controversial Focus

The biggest obstacle to the advancement of the bill comes from the Trump family's deep involvement in the conflicts of interest within the cryptocurrency industry:

1. Potential profits of USD1 stablecoin: The Trump family may earn huge profits annually through transaction fees.

2. "Pay-to-Meet" issue: Trump's offer of "Presidential Dinner" qualifications via cryptocurrency has sparked controversy.

3. The "revolving door" between legislation and industry: Bill drafters are accused of having connections with certain stablecoin projects.

Although the two parties reached a compromise to remove some controversial provisions, the moral tug-of-war continues.

Market Impact

If the bill is implemented, it will trigger a reshuffle in the stablecoin market:

• Leading companies are expected to obtain federal licenses directly, further expanding their market share.
• Traditional financial institutions may enter the market through on-chain payment services.
• It may alleviate the liquidity crisis of U.S. Treasury bonds in the short term, but could exacerbate the fiscal deficit issue in the long term.
• Global regulation may form a "US Dollar Stablecoin Alliance", reshaping the currency landscape.

Future Challenges

The bill still needs to pass three hurdles:

1. House of Representatives Review: Need to reconcile differences with the Senate version.
2. Presidential Signature: The Trump family's interests are deeply tied to the legislative details, which presents variables.
3. Judicial challenges: May lead to Supreme Court intervention due to the constitutional "compensation clause".

The ultimate goal of the "GENIUS Act" is to embed the dollar hegemony into the blockchain DNA, creating a "digital dollar empire." However, this strategy also faces challenges from DeFi bypassing compliance and other countries accelerating the internationalization of digital currencies. The final fate of the Act will largely determine the global financial order for the next decade.