Key Takeaways
- The U.S. Senate failed to approve an updated version of the GENIUS Act.
- The updated bill outlines a regulatory framework for payment stablecoins.
- Senate leader Thune was fundamental in blocking the bill.
The U.S. Senate narrowly rejected the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, a bill to regulate stablecoins, by a vote of 49-48, blocking its advancement after months of bipartisan work.
Sen. Bill Hagerty (R-Tenn.) introduced the GENIUS Act in February, seeking to create a clear regulatory framework for stablecoins at the state and federal levels.
It had picked up momentum with support from key lawmakers across the aisle, including Senate Banking Committee Chair Tim Scott (R-S.C.), Sen. Kirsten Gillibrand (D-N.Y.), and Sen. Cynthia Lummis (R-Wyo.).
The bill evolved from a draft proposal circulated in October 2024 and reflected a rare instance of bipartisan cooperation in crypto policy, balancing innovation, consumer protection, and financial stability.
Senate Votes Against Updated GENIUS Act
The U.S. Senate failed to advance the GENIUS Act on Thursday, falling short of the 60 votes needed in a procedural vote to move the bill forward.
The final vote was 49–48 after Republican Leader John Thune switched his vote to “no,” allowing the Senate to revisit the bill later.
Two Republicans, Josh Hawley and Rand Paul, joined Democrats in blocking cloture, signaling opposition not to the bill itself but to what they saw as a rushed process.
Sen. Ruben Gallego (D-Ariz.) thanked Republicans for their bipartisan effort and requested a combined vote on Monday to allow more time for debate and revisions.
However, the motion for unanimous consent to delay the vote was reportedly blocked by Sen. Elizabeth Warren (D-Mass.), who has raised concerns about Donald Trump’s ties to crypto, including a $2 billion deal involving the Trump-linked USD1 stablecoin.
Sen. Thune criticized Democrats for what he called deliberate obstruction, noting that the bill had already undergone six rounds of revisions to address their concerns. He warned that the delay could kill one of the few chances for a bipartisan crypto breakthrough this year.
With the latest setback, the prospects for the GENIUS Act appear significantly weakened.
Work Remains, Says Sen. Warner
Sen. Mark Warner (D-Va.) acknowledged the growing importance of stablecoins to the U.S. economy but said the GENIUS Act isn’t ready for a final vote.
“This is an area that demands American leadership. Stablecoins are undeniably part of the future of finance, and the United States should set the standard for responsible innovation in the digital financial space,” Warner said.
“While we’ve made meaningful progress on the GENIUS Act, the work is not yet complete. I simply cannot in good conscience ask my colleagues to vote for legislation when the text isn’t finished.”
Warner said he remains committed to advancing the bill and striking the right balance.
“I plan to continue working with my colleagues to strengthen this legislation and move it forward in a way that promotes innovation while protecting the interests of the American people,” he added.
GENIUS Act Update Set for May Floor Vote
The GENIUS Act is one step closer to becoming law. This is after Senators Bill Hagerty, Tim Scott, and Cynthia Lummis introduced a new version.
This update , which focuses on setting clear rules for payment stablecoins, could see a floor vote as early as this month, following a push from Senate Majority Leader John Thune.
The updated bill builds on amendments introduced by Sen. Hagerty in March, which the Senate Banking Committee approved. These changes aim to tighten regulation around stablecoins, with a key shift in oversight: state regulators would take the lead for issuers with market caps under $10 billion. In contrast, larger issuers could remain under state jurisdiction if they meet specific criteria.
Additionally, the bill introduces federal licensing and enforcement measures to boost consumer protection and ensure market stability.
With the clock ticking toward a possible May vote, all eyes will be on how this legislation will shape the future of stablecoin regulation.
Full Congress Next: The Path to Becoming Law
After receiving committee approval , the GENIUS Act moves to both chambers of Congress. This is before heading to President Donald Trump’s desk for final approval.
Though the bill has garnered bipartisan support, Democrats pushed for additional restrictions, many of which were rejected along party lines.
One key proposal, led by Sen. Elizabeth Warren, would have restricted stablecoin issuance to traditional banking institutions—a measure ultimately voted down.
“The bill invites scammers into the market by refusing to prohibit people convicted of fraud and money laundering from owning stablecoins,” Warren argued.
The Massachusetts senator asserted that without her changes, the bill would “supercharge the financing of terrorism.”
In response, Hagerty defended the bill as necessary to bring regulatory clarity to the fast-growing stablecoin market.
“It presents common-sense rules that protect consumers, promote competition, and foster innovation,” Hagerty said. “It’s time we provide the clarity and stability that our country and its innovators so desperately need.”
Requirements for Stablecoin Issuers
The amended GENIUS Act mandates that stablecoin issuers adhere to stricter reporting and compliance requirements, including:
- Monthly Liquidity Reports: Issuers must disclose details on reserve composition and the total number of stablecoins in circulation.
- Reserve Composition Standards: Stablecoin reserves must be held in demand deposits, U.S. Treasury securities, U.S. dollars, or other approved assets.
- Transaction Freezing Compliance: Issuers must develop protocols to comply with orders to freeze transactions. The U.S. Treasury Secretary would have the power to block transactions involving stablecoins issued by foreign entities.
- AML and KYC Compliance: The bill designates stablecoin issuers as financial institutions for anti-money laundering (AML) purposes, requiring them to implement compliance programs and conduct due diligence on high-value transactions.
These measures expand on previous drafts of the bill, which already included enhanced Know Your Customer (KYC) and AML provisions.
