GENIUS Act Approved by the Senate Banking Committee, Setting the Stage for Stablecoin Regulation

The Senate Banking Committee has approved the advancement of the GENIUS Act, a bill on the regulation of stablecoins.

The Senate Banking Committee has approved the advancement of the GENIUS Act, the bill on the regulation of stablecoins, with a vote of 18-6. The vote follows the initial approval of the bill in February, which was the result of a bipartisan effort. However, the bill has also faced criticism from some Democratic lawmakers, such as Senator Elizabeth Warren, who voiced concerns about the potential risks of terrorism financing and evasion of international sanctions.

Elizabeth Warren Contends Against the GENIUS Act

Elizabeth Warren expressed her strong opposition to the current text of the GENIUS Act, stressing that without changes, the legislation could facilitate the financing of terrorism. She also highlighted how the bill risks making it easier for countries like Iran, North Korea and Russia to circumvent economic sanctions.

Among the amendments proposed by the senator and subsequently rejected, there was the idea of limiting the issuance of stablecoin exclusively to banking institutions. This proposal aimed to strengthen control over entities capable of generating digital coins pegged to traditional currencies. However, none of her amendments were included in the final bill.

Tim Scott’s Vision and Innovation in the GENIUS Act

President of the Senate Banking Committee, Tim Scott, has welcomed the advancement of the GENIUS Act, calling it “a victory for innovation”. The senator highlighted how the legislation will introduce clear and sensible rules for the stablecoin sector.

Scott highlighted key points of the law:

– Obligation for stablecoin issuers to maintain 1:1 guaranteed reserves

– Compliance with anti-money laundering regulations

– Protection of US consumers

– Support for the position of the US dollar in the global economy

Updates to the GENIUS Act: increased control and security

The bill, introduced in February 2025 by Senator Bill Hagerty, has undergone several revisions aimed at strengthening protections for the financial system.

On March 10, Hagerty announced that the GENIUS Act would include:

– Greater transparency in risk management

– Stricter restrictions for the holding of stablecoin reserves

– **Stricter rules for compliance with anti-money laundering (AML) regulations**

– Measures aimed at preventing the financing of terrorism

– Clear directives for compliance with economic sanctions

According to Dom Kwok, founder of the Web3 learning platform Easy A, these new provisions could make it more difficult for foreign issuers to comply with U.S. regulations, favoring local companies.

The impact of the GENIUS Act on the financial sector

The preliminary approval of the bill is seen as the first step towards an integration between the traditional banking system and stablecoins. Lawyer Jeremy Hogan explained that the legislation is clearly outlining a future in which stablecoins will be a central part of the digital financial system.

In a post published on March 10 on the X platform (formerly Twitter), Hogan stated that the legislation is laying the groundwork for a merger between stablecoins and traditional digital banks.

This view was reinforced during the Crypto Summit at the White House on March 7, when Treasury Secretary Scott Bessent stated that the Trump administration plans to leverage stablecoins to maintain the US dollar as the global reserve currency.

Towards the final approval

Despite the positive vote in committee, the GENIUS Act still needs to be approved by both chambers of Congress before it can be submitted to President Donald Trump for the final signature.

The cryptocurrency industry is now eagerly awaiting future developments. The potential implementation of the regulation could represent a turning point for the regulation of stablecoins in the United States, finally providing clear rules for operators and investors.