The United States Senate Banking Committee elected to advance the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act in an 18-6 vote.
As CoinTelegraph reports, GENIUS Act backers faced pushback from bankers and their allies in the US Senate over fears that stablecoins will disintermediate banks and erode banking market share.
According to an article from American Banker, the bill requires 60 votes to pass in the Senate, meaning that at least seven Democrats will have to vote with Republicans to push through the Act.
This could prove a difficult proposition, as US Senator Elizabeth Warren, one of crypto’s staunchest political critics, is proposing an amendment prohibiting tech firms from issuing stablecoins. Warren wrote:
“If these firms want to engage in payments, they must partner with, or facilitate transactions among, regulated financial institutions. But this stablecoin bill breaks that status quo by green-lighting big tech companies and other commercial conglomerates to issue their own stablecoins.”
None of the amendments proposed by Senator Elizabeth Warren made it into the bill, including her proposal to limit stablecoin issuance to banking institutions.
“Without changes, this bill will supercharge the financing of terrorism. It will make sanctions evasion by Iran, North Korea, and Russia easier,” Warren argued.
Now do USDollars, Lizzy!
The GENIUS stablecoin bill was introduced by Senator Bill Hagerty on Feb. 4 as a comprehensive regulatory framework for tokenized US dollars.
As CoinTelegraph reported today, Hagerty defended the legislation against the proposed amendments from Senator Warren, arguing that the bill already includes provisions for consumer protection, Anti-Money Laundering, and crime prevention.
On March 10, Hagerty announced that the bill was updated to include stricter reserve requirements for stablecoin issuers, AML provisions, safeguards against terrorist financing, transparent risk management procedures, and stipulations for sanctions compliance.
According to Dom Kwok, founder of the Web3 learning platform Easy A, the newly added provisions will make it harder for foreign stablecoin issuers to comply, giving US-based firms a competitive edge.
Shortly after the bill was introduced to the US Senate, Federal Reserve Bank Governor Christopher Waller said non-banks should be allowed to issue stablecoins.
Waller argued that stablecoins could expand payment use cases, particularly in the developing world, due to their cost-savings and efficiency.
Stablecoin fees vs. legacy payment processing solutions. Source: Simon Taylor
Bank of America CEO Brian Moynihan told an audience at the Economic Club of Washington DC that the bank may enter the stablecoin business — likely launching its own dollar-pegged stable token.
During the first White House Crypto Summit on March 7, Treasury Secretary Scott Bessent said the US will use stablecoins to extend US dollar dominance.
Over-collateralized stablecoin issuers are collectively the 18th largest buyers of US government debt in the world – putting these firms ahead of countries like Germany and South Korea.
Senator Tim Scott, chairman of the Senate Banking Committee, characterized the bill as a victory for innovation. The Senator said:
“The GENIUS Act establishes Common Sense rules that require stablecoin issuers to maintain reserves backed one-to-one, comply with anti-money laundering laws, and ultimately protect American consumers while promoting the US dollar’s strength in the global economy.”
The bill must still pass a vote in both chambers of Congress before it is turned over to President Trump and ultimately signed into law.
However, the Senate Banking Committee advancing the bill represents the first step in clear, comprehensive legislation requested by the crypto industry.
Attorney Jeremy Hogan said the GENIUS Act signals an impending merger of the traditional financial system with stablecoins.
“The legislation is explicitly making plans for stablecoins to interact with the traditional digital banking system. The ‘merge’ is being planned,” the attorney wrote in a March 10 X post.
By adopting pro-stablecoin policies and promoting stablecoin usage worldwide, the US government can use stablecoins as a sponge to soak up inflation and protect the dollar’s status as the global reserve currency.
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