The US Senate Passes GENIUS Stablecoin Bill, Trump Family's Conflict of Interest Becomes a Controversial Focus

Original Title: "U.S. GENIUS Stablecoin Bill Passes Senate Vote, Awaits House and Presidential Approval, Trump Family's Stablecoin Raises Controversy"

Original Author: PANews

On the morning of May 20th, Beijing time, the U.S. Senate passed a procedural vote on the GENIUS Act stablecoin bill with a vote of 66 in favor and 32 against, initiating the cloture to end debate. While the bill itself has not yet passed, the next steps for the GENIUS Act will involve full Senate debate and amendment procedures, marking a significant milestone in clearing interim obstacles for the final legislation.

Since Senator Bill Hagerty introduced the GENIUS Act on February 4th, the bill text has undergone multiple revisions, incorporating more anti-money laundering, consumer protection, and custody provisions. It also includes restrictions on tech giants issuing stablecoins unless they implement robust financial risk controls and strong consumer data privacy measures. The advancement of the bill showcases a crucial bipartisan legislative maneuvering on the stablecoin issue.

Earlier this year, U.S. President Trump publicly stated that stablecoin and market infrastructure regulatory frameworks are expected to be enacted before the August congressional recess. If this significant bill is ultimately passed, it will become the first federal-level stablecoin legislation in the U.S., with far-reaching implications that cannot be ignored.

With the Senate vote approval, what are the key hurdles for the GENIUS Act to become formal law? What legislative procedures need to be completed, and what are the lawmakers' primary points of contention? PANews has outlined the core aspects of the process.

Continual Changes to the Bill: Inclusion of More Anti-Money Laundering Measures and Restrictions on Tech Giants

On May 8th, the GENIUS Act faced an unexpected defeat in the Senate cloture vote with a 48:49 result, falling short of the required 60 votes. However, on the morning of May 20th, the U.S. Senate voted again, with a 66-32 result, passing the cloture to end debate on the GENIUS Act stablecoin bill.

The cloture vote aims to conclude the debate on a particular issue and prevent senators from filibustering to delay or block the bill's vote.

Prior to this, lawmakers' points of contention revolved around several aspects, first being the possibility of tech giants like Meta issuing their own stablecoins. The second was the relationship between President Trump and the commercial interests in the crypto industry. Additionally, nine Democratic senators recently stated in a joint declaration that the bill still lacks in areas such as anti-money laundering, national security, and accountability mechanisms.

As of May 19, compared to the publicly reported old version of the U.S. Stablecoin Bill GENIUS Act (the latest version has not yet been formally released), it can be observed that the new version has added more provisions regarding anti-money laundering, consumer protection, and custody. The new draft introduces an entity called the "Stablecoin Certification Review Board," responsible for evaluating whether the regulatory regimes of various states meet federal standards, replacing the previously held powers exercised by the Treasury Department, and sets conditions for foreign stablecoin issuers operating in the U.S.

Furthermore, the bill will allow tech companies like Meta to launch stablecoins in the stablecoin market only after implementing robust financial risk controls, strong consumer data privacy protections, and fair business practices.

In addition to these amendments, the core provisions of the bill include:

1. The bill defines payment stablecoins as digital assets used for payment or settlement. These assets are pegged to a fixed currency value and are fully backed by U.S. dollars or other approved high-quality liquid assets at a 1:1 ratio.

2. Licensing and Regulation: The bill establishes a clear issuance license application process to guide entities seeking to issue stablecoins. It introduces a "dual regulatory framework," allowing issuers to choose between state or federal registration. Issuers with a market cap exceeding $100 billion will be subject to federal regulation. Issuers with a market cap below $100 billion may choose to continue operating under state-level regulatory frameworks, provided that their state regulations are substantially equivalent to federal requirements.

3. Reserve Requirements: Stablecoin issuers must maintain a 1:1 reserve ratio, with high-quality liquid assets such as cash, short-term U.S. Treasuries, or central bank deposits as reserve assets. Reserve funds must be managed separately from operational funds and undergo monthly certification.

4. Transparency: Issuers must publicly disclose their reserve assets and redemption policies.

5. Anti-Money Laundering (AML) Compliance: The bill classifies stablecoin issuers as financial institutions under the Bank Secrecy Act, requiring them to fulfill comprehensive AML obligations, including consumer identification, due diligence, and reporting of suspicious activities.

6. Consumer Protection: In case of issuer bankruptcy, stablecoin holders will have priority over other creditors for payment.

7. Regulatory Jurisdiction Definition: The bill explicitly states that payment stablecoins are not considered securities, commodities, or investment companies under existing federal law.

On May 15, according to the content on page 2 of the GENIUS Act draft disclosed by crypto journalist Eleanor Terrett, it is proposed to prohibit stablecoin issuers from misleadingly claiming FDIC insurance or using terms associated with the U.S. government; prohibit non-financial tech companies like Meta, Google, etc., from issuing stablecoins unless compliant with regulations, thereby strengthening the separation of banking and commerce; the draft also enhances enforcement capabilities against misconduct and expands the ethical oversight scope of government special employees (including Elon Musk).

During the bill amendment process, bipartisan lawmakers also fiercely debated the Trump family's stablecoin project.

Elizabeth Warren is the Democratic ranking member of the Senate Banking, Housing, and Urban Affairs Committee, and she publicly stated: President Trump and his associates have already earned billions of dollars from his cryptocurrency business. Each year, Trump is expected to earn hundreds of millions of dollars from his USD1 stablecoin. The latest draft of the GENIUS Act circulating online does not include any provisions to prevent Trump and his family from profiting massively through his allegedly corrupt cryptocurrency scheme. Instead, the bill will expand the stablecoin market, further boosting Trump's crypto earnings.

Ultimately, as of May 15th, bipartisan senators reached a consensus on this issue. Democratic Senator Kirsten Gillibrand stated that the wording of the bill has been modified to remove provisions targeting Trump's cryptocurrency project, such as meme coins. She emphasized that the amended bill has improvements in consumer protection and does not focus on Trump's ethical issues but aims to regulate the stablecoin space.

Approval Needed from the House and President

Analysis suggests that the GENIUS Act may face a longer process in the Senate but an easier path through the House.

Typically, when a bill is introduced, it is assigned to a committee. Committee members will study, discuss, and modify the bill. The GENIUS Act, introduced by Senator Bill Hagerty in the Senate on February 4th this year, was assigned to the Senate Banking, Housing, and Urban Affairs Committee.

Subsequently, the bill will be voted on in the respective chamber. If the bill passes in one house of Congress, it will be sent to the other house for a similar process of study, discussion, modification, and voting.

Once both houses pass the bill, the two sides must reconcile the differences between the two versions. Then, both houses will have a final vote on the same version of the bill. If the bill is approved, it will be sent to the President of the United States.

After receiving the bill, the President will review it. The President can either approve the bill and sign it into law or reject it, known as a veto. If the President chooses to veto the bill, in most cases, Congress can vote to override the President's decision and make the bill a law. However, if the President does not sign the bill during a congressional recess, the bill will be automatically vetoed. This is known as a pocket veto, and Congress cannot override such a veto.

From the current progress of the GENIUS Act, it is evident that the Senate approval process is time-consuming due to the allowance of filibusters to block the bill from reaching a final vote. The cloture motion to end debate this time requires a supermajority of three-fifths (60 out of 100 votes). The current Senate composition is as follows: Republicans: 53 seats, Democrats: 45 seats, Independents: 2 seats (usually voting in alignment with Democrats). This means that even if all Republican members vote in favor this time, they would need the support of Democratic members.

Now, after the cloture motion on the GENIUS Act passes in the Senate, it will move into full Senate debate and amendment stages before heading to the House of Representatives.

However, legislation in the House only requires a simple majority (218 out of 435 votes) to pass. Currently, the House is controlled by a Republican majority (220-215), making the passage of the GENIUS Act in the House relatively easier.

If the GENIUS Act is successfully signed into law by the President, it will have a profound impact on the stablecoin market. For instance, it may drive industry consolidation, leading some small issuers to exit the market due to an inability to meet reserve requirements. Consumer trust would strengthen, potentially boosting stablecoin adoption. Enhanced reserve audits and anti-money laundering compliance measures are expected to increase market transparency and attract institutional investors. However, non-financial tech companies issuing stablecoins may face limitations, as the new provisions require non-financial firms issuing stablecoins to comply with regulatory rules, potentially introducing more barriers for non-financial tech giants like Meta and Google to enter the stablecoin space.

Nevertheless, the unresolved issue of the Trump family profiting from World Liberty Financial's USD1 remains a challenge. According to the latest public version, the bill does not explicitly restrict the President and his family from participating in cryptocurrency projects, which could become a future point of contention.

On May 9, U.S. Treasury Secretary Scott Bessent stated that the U.S. Senate failed to advance the GENIUS Act, calling it a "missed generational opportunity to expand the dollar's dominance and financial innovation influence." He warned that without a unified federal regulatory framework, stablecoins will develop within a fragmented state regulatory environment, hindering the U.S.'s global leadership and potentially pushing digital asset innovation overseas.

Currently, although the GENIUS Act stablecoin bill has not been formally signed into law, the successful cloture motion sets the stage for the legislation. If it successfully navigates the hurdles, the bill will not only become the first federal-level stablecoin regulatory framework in the U.S. but also has the potential to reshape the entire stablecoin market landscape.

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