GENIUS Act: What You Should Know About the New U.S. Crypto Regulation Bill

In a major step toward regulating the cryptocurrency sector, the U.S. Senate voted 68–30 on Tuesday to approve the GENIUS Act, a bill focused on creating oversight rules for certain digital assets — particularly stablecoins, which are cryptocurrencies linked to real-world assets like the U.S. dollar.

Despite resistance from some Democratic lawmakers concerned about former President Donald Trump’s involvement in the crypto sector, the bill secured bipartisan backing. Among those crossing the aisle were Senators Cory Booker (D-NJ) and Adam Schiff (D-CA).

The measure, which was shaped with strong industry input, aims to bring stability and consumer safeguards to the growing stablecoin space — digital tokens that are often used in financial transactions due to their lower price volatility compared to typical cryptocurrencies like Bitcoin or Ethereum.

What Does the GENIUS Act Do?

The GENIUS Act sets forth a regulatory framework for stablecoin issuers, requiring them to:

• Maintain 1:1 reserves of assets that back their digital tokens — including cash, short-term U.S. Treasury securities, or insured bank deposits.
• Prioritize repayments to stablecoin holders if an issuing firm files for bankruptcy.
• Comply with anti-money laundering regulations and anti-terrorism sanctions to prevent illicit use of the tokens.

Stablecoins are intended to serve as a reliable bridge between traditional finance and digital currencies, avoiding the wild price swings that characterize other cryptocurrencies. The new rules aim to ensure that users can confidently convert stablecoins back into fiat money when needed.

Supporters Say It’s a Step Toward Mainstream Crypto Integration

Backers of the bill see it as a pivotal moment for the crypto sector — one that can transform stablecoins into everyday financial tools used by consumers and institutions alike.

“This legislation could be the turning point,” said Christian Catalini, founder of the MIT Cryptoeconomics Lab. “It clears the path for more stablecoin issuers to enter the space, giving consumers greater choice and fostering real competition in payment innovation.”

Catalini also emphasized that the bill shifts responsibility from consumers to regulators when it comes to evaluating the reliability of stablecoin issuers. Instead of users trying to assess risk alone, issuers will now need to compete based on usability, features, and regulatory compliance.

Critics Say It Leaves Too Many Loopholes

However, not everyone is satisfied with the final version of the bill. Senator Elizabeth Warren (D-Mass.) has been a vocal critic, arguing that the law is too lenient and heavily tilted in favor of crypto firms.

“This isn’t regulation — it’s deregulation in disguise,” Warren said. “A stronger bill could have protected consumers and safeguarded the economy, but this one could actually create more problems than it solves.”

Critics also cite potential conflicts of interest, especially in light of Trump’s ongoing involvement in crypto ventures. In March, a Trump-linked firm, World Liberty Financial, launched the USD1 stablecoin. This token was recently used by an Abu Dhabi investment group to inject $2 billion into crypto exchange Binance — a deal from which Trump’s business could benefit financially.

While the GENIUS Act does include a clause barring sitting members of Congress or senior federal officials from launching stablecoin products during their public service, critics argue this does little to address the broader ethical risks.

Warren contends that Trump’s coin-related ventures could be exploited to provide personal or political favors — such as tariff breaks or even federal appointments — to those who support his stablecoin project.

What’s Next?

The GENIUS Act now moves to the House of Representatives for consideration. If passed there, it would represent one of the first major federal laws governing the crypto sector — potentially laying the groundwork for more comprehensive regulation in the years ahead.