- The GENIUS Act faces a critical Senate vote as bipartisan support grows despite controversy over Trump’s crypto ties and USD1 stablecoin.
- Industry leaders support the GENIUS Act, citing its potential to standardize stablecoin use and expand digital financial inclusion in the U.S.
- Critics, led by Sen. Warren, warn the bill may accelerate financial risks and corruption linked to Trump’s USD1 stablecoin project.
The Senate is set to vote Tuesday at 11:30 AM EST on the GENIUS Act, a pivotal cryptocurrency bill. Lawmakers voted 66-22 late Monday to advance the bill, which focuses on regulating stablecoins. These are digital currencies pegged to assets like the U.S. dollar. The bill gained bipartisan traction despite pushback tied to former President Donald Trump’s crypto interests.
The GENIUS Act sets comprehensive rules for stablecoin issuers. Firms would be required to hold asset reserves backing their digital currencies. This move aims to protect consumers during high-risk market selloffs. Additionally, the bill mandates that coin holders receive repayment priority if an issuer goes bankrupt.
Industry Applauds Regulation Push
The crypto industry supports the measure. It views the act as a major leap toward mainstream adoption of digital assets. The bill offers a clear framework that may help build public trust in stablecoins. Austen Jensen of the Retail Industry Leaders Association praised the proposal. He said it could enable smoother digital payments and expand financial access for millions.
Moreover, Sarah Milby of the Blockchain Association said the bill reinforces U.S. leadership in the digital asset space. The measure also introduces anti-money laundering requirements and anti-terrorism safeguards for issuers. Hence, supporters believe it balances innovation with necessary oversight.
Critics Sound Alarm Over Trump’s Ties
However, the bill has sparked fierce debate. Critics argue it lacks strong enough safeguards against political corruption and economic risk. Senator Elizabeth Warren, a vocal opponent, warned that the bill enables Trump’s financial ventures. Trump’s firm recently launched USD1, a dollar-backed stablecoin. Since March, USD1 has become the fifth-largest stablecoin globally.
Warren believes the GENIUS Act would supercharge USD1’s reach and profitability. Consequently, she fears it could become a tool for illicit finance. She warned it may act as a shadow bank for foreign buyers and large corporations. Besides, she linked the bill to a potential future financial crash.
Additionally, some Democrats raised red flags over possible conflicts of interest. Still, 16 Democrats supported the bill, including Senators Cory Booker and Adam Schiff. Despite the controversy, the bill appears to have strong momentum. The final vote could reshape the future of U.S. crypto regulation.
