Senate Fast Tracks Stablecoin Regulation; Ten Senators Object
Commentary by Gage Raju-Salicki
Senate Majority Leader John Thune moved to fast-track procedures for a vote on a bill to create a regulatory framework for stablecoins. (See related coverage.) Ten Democratic Senators objected to the revised version of the "Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act."
Senator Thune reportedly told GOP senators "that he's aiming to get floor action on the [updated "Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act] this month."
Co-sponsor of the bill and Subcommittee on Digital Assets Chair Cynthia Lummis characterized the GENIUS Act as "strik[ing] the balance of establishing proper guardrails that protect consumers while preserving financial innovation and America's dollar dominance in the global financial system."
Ten Democratic Senators, led by Senator Ruben Gallego, issued a statement in opposition to the latest version of the bill. They said: "the bill as it currently stands still has numerous issues that must be addressed, including adding stronger provisions on anti-money laundering, foreign issuers, national security, preserving the safety and soundness of our financial system, and accountability for those who don't meet the act's requirements."
Commentary
Over the weekend, there was (and continues to be) some debate around the GENIUS Act. Senator Ruben Gallego and nine other senators stated that they could not support the updated GENIUS Act—text we are yet to see—unless concerns regarding anti-money laundering, foreign issuers, national security, and general accountability were addressed by revisions.
These issues are interesting given discussions around what would happen to Tether should the GENIUS Act be passed in its current form. Tether, notably, operates outside of the United States. Would it require that Tether launch a U.S.-based stablecoin as it has indicated it may? Moreover, the GENIUS Act already has a provision treating all payment stablecoin issuers as financial institutions for purposes of the Bank Secrecy Act.
With that said—and despite the current tumult around the legislation—the majority of the bill appears safe for now. It is unlikely we will see qualifications for stablecoin issuers change at this point, but we may see some AML or foreign issuer changes in the coming weeks. For the time being, however, domestic stablecoin issuers who have lined up compliance plans do not need to make any changes.
Related Articles
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The Congressional Research Service reviewed the regulatory framework and licensing process for the "Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025." The bill was introduced on February 4th, 2025, and co-sponsored by lawmakers from both parties.
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A bipartisan group of lawmakers introduced legislation to regulate payment stablecoins and establishing oversight for issuers.