Senate Expected to Pass Stablecoin Bill Next Week

The Senate is preparing to vote on legislation that would bring the first major federal oversight to stablecoins, the digital currencies that have become a cornerstone of cryptocurrency trading.

Sen. Cynthia Lummis, R-Wyo., said the Guiding and Establishing National Innovation for US Stablecoins Act — dubbed the GENIUS Act — will likely pass next week. The Senate Banking Committee already approved the bill 18-6 in a rare show of bipartisan support.

The legislation would treat companies that issue stablecoins like traditional financial institutions, requiring them to follow anti-money laundering rules and maintain reserves to back their digital tokens. Stablecoins are cryptocurrencies designed to hold steady value by being tied to the dollar or other assets.

“This bill represents a critical step towards providing clarity and security in the digital asset space,” Lummis said. “It will help protect consumers and ensure that the U.S. remains at the forefront of financial innovation.”

The push for regulation comes as stablecoins have exploded in popularity. Traders use them to move quickly between different cryptocurrencies without the wild price swings that plague Bitcoin and other digital assets. But regulators worry about risks to consumers and the broader financial system as these largely unregulated tokens gain wider use.

The bill would require stablecoin issuers to hold enough traditional assets — like cash or Treasury bonds — to back every token they create. Companies would also need to submit to regular audits and follow the same rules that govern banks when it comes to preventing money laundering.

The legislation includes restrictions that have sparked debate in the crypto industry. Foreign companies would face limits on issuing stablecoins to U.S. customers, and tokens that pay interest to holders would be prohibited.

Industry groups have generally supported the framework while pushing for changes to specific provisions. Some worry the rules could drive innovation overseas, while consumer advocates argue stronger protections are needed.

The bill’s advancement reflects growing acceptance of digital assets in Washington. Rep. Tim Burchett, R-Tenn., recently introduced separate legislation calling for the government to build a strategic Bitcoin reserve, signaling how mainstream cryptocurrency discussions have become.

If passed, the GENIUS Act would mark the first comprehensive federal regulation of stablecoins, potentially setting a template for other countries grappling with how to oversee the rapidly evolving cryptocurrency market.