US Senate votes for GENIUS Act: Strengthening the dollar in the crypto market!

US Senate votes for GENIUS Act: Strengthening the dollar in the crypto market!

On May 20, 2025, the US Senate passed the GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins) by a vote of 66 to 32. This law aims to create clear rules for the collateralization of stablecoins and ensure compliance with anti-money laundering laws. The passage of the law could further strengthen the dominance of the US dollar in the crypto economy, as Cointelegraph reported.

The GENIUS Act requires stablecoins to be backed by the US dollar at a 1:1 ratio, which could solidify its role as a “global digital settlement currency.” This would create a comprehensive federal regulatory framework for stablecoins, which was particularly well received by the crypto industry. Industry associations and stablecoin issuers praised the move, while international observers expect other economies such as the EU, Singapore and Japan could adapt their stablecoin frameworks to the US model.

Regulatory details

The GENIUS Act requires issuers to back their digital assets with liquid and safe assets, such as U.S. Treasury securities. They must also comply with strict anti-money laundering regulations and prioritize repayments to investors in the event of bankruptcy. Misappropriation or rehypothecation of stablecoin reserves is strictly prohibited, and reserves may only be used for redemptions and certain safe investments, such as cvj.ch elaborates further.

Major technology companies such as Meta and Google are not allowed to issue their own stablecoins to prevent possible market concentration. These provisions are part of a broader attempt to promote innovation while ensuring consumer protection. Senator Mark Warner has stressed the need for a clear regulatory framework, while Senator Elizabeth Warren has raised concerns about possible conflicts of interest, particularly regarding financial benefits to former President Donald Trump.

Looking into the future

Some observers, including Andrei Grachev of DWF Labs, highlight that the world is watching US regulation of stablecoins. The GENIUS Act could be seen as the first step towards global regulation for cryptocurrencies. However, before the law was passed, there were concerns from certain Democrats about the Trump family's involvement in crypto projects.

In summary, demand for US dollars benefits the US economy by creating a constant buyer for its debt. Tether, the leading stablecoin provider, now manages over $120 billion in US Treasury securities. The reactions to the new law and the associated regulations so far appear to be predominantly positive.