What is the GENIUS Act?

By Amy West GovTrack.us, June 20, 2025)

The House was out this week and the Senate only in session for two days. In those two days, the Senate mostly furthered administration nominees. However, they did vote on one bill that warrants some explanation.

GENIUS Act

The GENIUS Act passed the Senate 68-30 on Tuesday. It will next go to the House and is nowhere near becoming law.

What is the GENIUS Act?

Currently, cryptocurrencies are unregulated. For the vast majority of currencies, this means their value fluctuates wildly and constantly. So, "stablecoins" were invented. Stablecoins, as the name suggests, are supposed to retain a more stable value by being pegged to the U. S. dollar. However, there's no regulation of them either. At the moment, if you lose all your investment because, name notwithstanding, a stablecoin's value fluctuates after all, you have no recourse.

The GENIUS Act is intended to address this by requiring that any entity that issues a stablecoin have $1 in real assets to go with each $1 in the coin. Further, according to CNBC,

The GENIUS Act, short for the Guiding and Establishing National Innovation for U.S. Stablecoins Act, sets guardrails for the industry, including full reserve backing, monthly audits, and anti-money laundering compliance.

It also opens the door to a broader range of issuers, including banks, fintechs, and major retailers looking to launch their own stablecoins or integrate them into existing payment systems.

There are a number of different objections to the GENIUS Act, some based on the basic concept, such as this piece from Dr. Eichengreen, professor of economics and political science at the UC-Berkeley. Dr. Eichengreen argues that the GENIUS Act effectively recreates the 19th century banking structure of the U. S. Banks then tended to be highly unstable and subject to runs on a regular basis because each state had pretty much its own currency. Now, instead of states, it will be banks, financial tech companies and retailers.

Another objection reported in Ledger Insights is that

The controversial clause permits a state bank with a regulated stablecoin subsidiary to provide money transmitter and custodial services in any other state. While host states can impose consumer protection laws, they cannot require the usual authorization and oversight typically needed for out-of-state banking operations.

CNBC also notes that the House version of the bill, H.R. 2392: STABLE Act of 2025, diverges from the Senate's on who does the regulating.

The final category of objection, though not one strong enough to prevent passage in the Senate, is the President's enthusiastic and lucrative participation in both regular crypto currency and stablecoins. There were numerous attempts to add amendments to the bill to prevent any elected officials from profiting off digital assets, but they were all blocked.

What Now?

The GENIUS Act goes to the House. If it passes as is, then it becomes law. If the House insists on changes, most likely to who does the regulating, then it would go back to the Senate again.

Regardless of what happens in Congress, the President will continue to profit wildly because neither chamber has included provisions to regulate or limit the participation of the President in the crypto market. The President reported $600 million in income for 2024, of which at least $57 million is from fees collected from the purchase and trading of his own cryptocurrency.

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Hawaii Congressional Delegation