On Monday evening, the United States Senate achieved a significant milestone in the regulation of digital assets by successfully advancing the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act of 2025.
The procedural vote of 66-32 suggests a bipartisan inclination towards establishing a comprehensive regulatory framework for stablecoins, potentially reshaping the cryptocurrency landscape within the United States.
Despite existing disagreement, the GENIUS Act still won support from both parties. Some Democratic senators seemed to vote for the bill after changes were made to fix ethical worries and possible clashes of interest, showing they were ready to talk and find common ground.
US Senate Passes GENIUS Act Bill
Though presented as a plan with support from both parties, the GENIUS Act has met many political problems. Specifically, the World Liberty Foundation’s (WLF) USD1 stablecoin, supported by the Trump family, has caused much argument. Critics worry about conflicts of interest because of the President’s involvement.
Earlier this month, the US Senate did not pass the stablecoin bill in a crucial vote because Democratic Senators wanted more changes. Senators Elizabeth Warren and Bernie Sanders strongly opposed the bill. They said it could make the President profit unfairly and worsen financial problems.
After the Senate debates, the Senate will hold a full vote on the GENIUS Act before sending it to the House of Representatives for review and a vote. Simultaneously, the House is developing its stablecoin legislation, the STABLE Act. Many believe combining the GENIUS Act and the STABLE Act is essential for establishing clear and consistent regulations across both chambers of Congress.
Last week, Senator Bill Hagerty’s prediction of Senate passage renewed hope within the industry. The bill has garnered support from key figures, including XRP lawyer John Deaton, Federal Reserve Chair Jerome Powell, Coin Center CEO Jerry Brito, former SEC chair Paul Atkins, and Coinbase CEO Brian Armstrong.
AAVE Price Surge 25% Following Bill Advancement
The GENIUS Act becoming law is seen as good news for the cryptocurrency market. Because it makes the rules clearer, banks and payment companies may feel more secure in launching new stablecoins. These stablecoins could make it easier for more people to enter the cryptocurrency world, leading to wider use and smoother trading.
The DeFi area may benefit significantly from the GENIUS Act. Projects like AAVE and KMNO might see more money invested because of the expected rise in stablecoins. Coinbase (COIN) could also earn more since it makes a lot of money from USDC. These points point to a possible big rise in crypto values in the second half of the year.
Notably, the passage of the bill has already triggered a surge in the prices of various cryptocurrencies. AAVE, for instance, experienced a remarkable jump of over 24.6%, reaching $268, with trading volume spiking by more than 64%. This surge underscores the renewed interest in the DeFi sector following the Senate’s advancement of the GENIUS Act.
AAVE plays a pivotal role in the DeFi lending space, and clearer regulations surrounding stablecoins could foster a more stable and attractive environment for the platform’s growth. In tandem with the price surge, Aave’s TVL has soared to $30 billion, marking a 25% increase and further solidifying bullish sentiment within the market.
Proposed Legislation Guideline
The proposed legislation features key provisions: it requires issuers to maintain 1:1 reserves backed by U.S. dollars or equivalent assets; it mandates federal supervision for large issuers with a market capitalization exceeding $10 billion; and it implements strict anti-money laundering (AML) and know-your-customer (KYC) protocols.
Notably, major stablecoin issuers such as Circle (USDC) and Tether (USDT) support the Act, recognizing its potential to facilitate the integration of digital assets into traditional financial systems.
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