Historic regulation redefines stablecoins
The recent cloture vote approval for the GENIUS Act in the United States Senate represents
a significant advancement in the country’s stablecoin regulation process. With 66 votes in
favor, the move signals a rare bipartisan consensus around the need to establish a clear
legal framework for fiat-backed digital assets. The bill proposes specific guidelines for the
issuance, custody, and supervision of stablecoins, differentiating between bank and
non-bank issuers, and requiring liquid reserves and regular audits. Senators such as Cynthia
Lummis emphasize that the proposal is essential to protect the financial system without
stifling innovation. For the market, this progress is historic as it provides a concrete response
to the legal uncertainty that has limited institutional expansion in the sector for years.
On the global stage, the American move occurs amid a regulatory race. Jurisdictions like the
European Union with MiCA, the United Kingdom, Japan, and Singapore have been
structuring normative frameworks to attract capital and innovation in digital assets. The
United States, traditionally a leader in international financial governance, now seeks to
regain leadership in the digital realm. The GENIUS Act by proposing transparent and
predictable rules strengthens the dollar’s position in the stablecoin ecosystem and
represents a strategic step for the US to consolidate its influence in the architecture of global
digital finance.
What is the GENIUS Act and why does it matter?
The GENIUS Act establishes stringent guidelines for the issuance of stablecoins in the US.
The bill requires these assets to be fully backed by dollars or equivalent liquid assets such
as short-term Treasury securities. The proposal aims to ensure that stablecoins’ value is
always protected by solid reserves.
For issuers with a market value above $50 billion, the bill mandates mandatory and regular
audits. It also includes specific rules for foreign issuers wishing to operate in the country,
demanding compliance with US standards. Furthermore, there are provisions aimed at
consumer protection and conflict of interest prevention.
Despite initial resistance from part of the Democratic side, the GENIUS Act advanced with
bipartisan support after intense negotiations. Concessions such as increased oversight by
the Federal Reserve were decisive in securing consensus. This movement reflects growing
pressure for the US to assume a leading role in digital asset regulation.
Why this moment is historic
The moment is considered historic by several senators including Bill Hagerty and Cynthia
Lummis who highlighted the legislative advance as a singular achievement. This episode
shows a rare demonstration of bipartisan cooperation on an emerging issue reflecting
recognition of the importance of financial digitization for the country’s future. Industry
mobilization was also significant with around 60,000 emails sent to the Senate before the
vote demonstrating private sector engagement in shaping this regulation.
The expected impacts go beyond simple regulation aiming to protect investors, boost
technological innovation, and stimulate demand for Treasury securities. This initiative
repositions the United States at the forefront of the digital financial market creating a safer
and more favorable environment for sustainable financial development. It is a milestone that
strengthens confidence in the system and promotes significant advances in integrating
technology into both public and private sectors.
The global regulatory chessboard: what is at stake
With the growing global adoption of cryptoassets, the regulatory chessboard is intensifying
among major financial centers such as the European Union through MiCA, the United
Kingdom, Hong Kong, and other markets that have already established or are advancing
regulatory frameworks for cryptoassets and stablecoins. In this scenario, the United States
faces the challenge of reclaiming its leadership in digital innovation threatened by the
progress of these jurisdictions and the GENIUS Act emerges as a strategic response to
reaffirm its leadership. Additionally, the proposed regulation has the potential to consolidate
the dominance of the dollar in the digital environment as dollar-backed stablecoins already
represent a significant portion of the crypto market reinforcing American geopolitical
influence by supporting this hegemony under a solid and trustworthy institutional framework.
Challenges and next steps
The bill still faces important challenges in the legislative process as it needs to go through
amendments and a new vote in the Senate before advancing. Moreover, it depends on
negotiations with the House of Representatives which has its own text, the STABLE Act,
requiring harmonization between the different proposals to enable effective and
comprehensive legislation.
Politically, the bill’s advancement encounters resistance including criticisms from senators
such as Elizabeth Warren who point to alleged ethical loopholes in the text involving figures
like Donald Trump. Discussions are also underway regarding the possibility of merging the
stablecoin bill with the market structure bill adding complexity to the negotiations. Thus,
despite significant progress, the legislative path remains challenging and subject to
important adjustments.
What this advance signals for the future
This legislative progress indicates that the United States is finally willing to build a regulatory
environment that fosters technological innovation while maintaining the necessary legal
certainty to protect the market and investors. By establishing clear and consistent rules, the
country demonstrates its commitment to creating a robust regulatory framework that keeps
pace with the rapid evolution of the digital financial sector.
Stablecoin regulation represents a fundamental step toward consolidating a dollarized digital
economy bringing greater transparency and credibility to transactions involving these digital
assets. This movement may strengthen confidence in stablecoin use boosting adoption both
domestically and internationally and creating conditions for a safer and more efficient
financial infrastructure.
Finally, the world is closely watching this process as the project’s success or failure could
define the direction of the next phase of global finance. By taking the lead in digital asset
regulation, the United States reinforces its economic and technological influence and sets an
international standard that may influence policies and practices in other jurisdictions shaping
the future of the global financial market.
