Nikolas Sargeant
A full Senate vote on the GENIUS is anticipated before Memorial Day. The bill, introduced by Senator Bill Hagerty (R-TN), seeks to establish a federal framework for stablecoin issuers, requiring them to maintain one-to-one reserves and comply with anti-money laundering laws. Senate Majority Leader Thune and Republican lawmakers discussed the timeline during a closed-door lunch on Tuesday, according to Politico. Notably, the bill has garnered bipartisan support, with five Democratic senators joining Republicans in the 18-6 committee vote.
However, the legislation has faced criticism for potentially creating a competitive imbalance. The GENIUS Act exempts foreign stablecoin issuers, such as Tether, from U.S. oversight for at least two years, raising concerns about consumer protection and market fairness. Critics argue that this exemption could undermine the bill's objectives and place U.S.-based issuers at a disadvantage.
In response to these concerns, the bill's sponsors have emphasized the importance of maintaining innovation within the U.S. financial system. Senator Tim Scott (R-SC), a co-sponsor of the bill, stated that the legislation aims to "keep innovation and opportunity on American soil rather than driving it overseas."
As the Senate prepares for the upcoming vote, the outcome of the GENIUS Act could significantly influence the future of stablecoin regulation in the United States, balancing the need for oversight with the desire to foster innovation in the digital asset space.
SEC's Evolving Stance on Stablecoins
Amidst legislative developments, the U.S. Securities and Exchange Commission (SEC) has been actively refining its approach to stablecoin regulation. In April 2025, the SEC clarified that certain stablecoins, particularly those that are fully-reserved and dollar-backed, do not qualify as securities. This decision aligns with the SEC's broader efforts to distinguish between different types of digital assets and apply appropriate regulatory frameworks. The SEC emphasized that while these stablecoins are not classified as securities, issuers must still adhere to anti-money laundering (AML) and know-your-customer (KYC) regulations.
In a notable development, the SEC concluded its investigation into PayPal's PYUSD stablecoin without taking enforcement action. The inquiry, initiated in November 2023, was closed in February 2025, reflecting a shift towards a more accommodating regulatory environment under the current administration. This move is part of a broader trend where the SEC has been scaling back enforcement actions against major cryptocurrency firms, signaling a potential easing of regulatory pressures on the industry.
These regulatory shifts have significant implications for the GENIUS Act. While the bill seeks to establish a federal framework for stablecoin issuers, the SEC's evolving stance may influence the bill's provisions and its alignment with existing regulatory guidelines. The interplay between legislative and regulatory bodies will be crucial in shaping the future landscape of stablecoin regulation in the United States.
