Exploring the Intricacies of the GENIUS Act - Recently Enacted U.S. Cryptocurrency Legislation
The US is stepping into a new era of digital asset regulation with the passage of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. The bill, which was passed by the U.S. Senate on June 18, 2025, aims to establish a comprehensive regulatory framework for stablecoins, a type of cryptocurrency pegged to stable assets like the U.S. dollar to maintain a consistent value.
The legislation extends ethics standards to special government employees and prohibits members of Congress or senior executive branch officials from issuing stablecoins during their tenure. It also mandates that stablecoin issuers obtain licenses to operate in the U.S. market and hold reserves of liquid, safe assets like U.S. Treasury bills to back their tokens.
Nonbank issuers fall under the purview of the Office of the Comptroller of the Currency (OCC). For stablecoins with a market value exceeding $10 billion, the Federal Reserve (the US central bank) assumes responsibility for supervision. This threshold was established after the adoption of the GENIUS Act.
The Financial Innovation and Technology for the 21st Century Act (FIT21) also plays a role in clarifying the roles of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) in regulating digital assets.
The passage of the GENIUS Act positions the US to compete globally, especially as the EU’s digital euro pilot progresses. The EU's MiCA framework is gaining traction, positioning the EU to compete with the US in stablecoin regulation. However, challenges like regulatory clarity for non-stablecoin assets and potential Democratic opposition remain in passing additional crypto legislation.
The crypto industry's influence, backed by pro-crypto lawmakers like Sens. Hagerty and Lummis, suggests more progress is possible in 2025. In March 2025, the House passed H.J.Res.25 to repeal the Biden administration's "DeFi Broker Rule."
The GENIUS Act focuses on regulating stablecoin issuers to ensure transparency, security, and consumer protection. It also includes anti-money laundering (AML) and consumer protection measures.
Interestingly, Sen. Cynthia Lummis has proposed a bitcoin reserve to address national debt. Meanwhile, the Trump administration and Republican lawmakers have rejected a US central bank digital currency (CBDC). Some predictions suggest that related tokens like XRP, used in Ripple's payment systems, could rise to $5 by 2025 due to the passage of the GENIUS Act.
The House's STABLE Act differs from the GENIUS Act, and reconciling the two could delay final enactment. Regardless, the passage of the GENIUS Act marks a significant step forward in the regulation of digital assets in the US.
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