Author: Patti, ChainCatcher
Editor: TB, ChainCatcher
Less than two weeks after experiencing failure, the U.S. Senate's GENIUS Act unexpectedly passed a critical procedural vote on Monday evening (May 20), marking a revival of political momentum for this stablecoin legislation and potentially being formally passed in the coming days.
This was a "motion to proceed" vote, meaning the bill is approved to enter the next stage of review. Although this does not equate to final legislative passage, it lays a crucial foundation for subsequent voting. According to Senate procedures, for the bill to be officially passed, it must first obtain over 60 votes to "terminate debate" (cloture vote), and then complete voting with a simple majority.
From Failure to "Resurrection"
On May 9, the bill was rejected in a similar procedural vote with a 48:49 result, primarily due to strong concerns within the Democratic Party about potential conflicts of interest for the Trump family in the crypto sector. However, within just one week, the Senate reached a compromise and proposed a revised bill, ultimately gaining over 60 votes of support in the May 20 vote, successfully crossing the procedural threshold.
The key to this voting reversal was the softening of positions within the Democratic Party and continuous pressure from industry organizations.
After the first motion was rejected, crypto giants like Coinbase and Circle quickly took action. Coinbase CEO Brian Armstrong publicly supported the bill for the first time and mobilized platform users to contact congressional representatives through his political action organization "Stand With Crypto" to push for a bill review.
The organization has currently raised over $300 million in political donations for the 2026 midterm elections and rates each representative in their App. Coinbase also clearly stated that if the stablecoin bill cannot advance, "we cannot move forward with more comprehensive market structure legislation."
Meanwhile, the two co-sponsors of the bill, Gillibrand and Lummis, successfully persuaded several Democratic representatives to change their stance, with Gillibrand even "reversing" herself in the two rounds of voting.
[The translation continues in the same manner for the rest of the text, maintaining the specified translations for specific terms and preserving XML tags.]The draft first introduced a "moral boundary" clause, prohibiting federal administrative officials (such as the Secretary of the Treasury, SEC Chairman, etc.) from directly or indirectly participating in stablecoin issuance, and including specific "special government employees" (such as White House advisor David Sacks) in the restricted list. However, the President and Vice President are exempted from this ban, especially in the context of multiple tech-friendly individuals within the current Trump administration deeply involved in shaping Web3 policy, which will undoubtedly become ammunition for political opponents to attack.
For large tech platforms, this draft also sets new thresholds.
Out of wariness of "platform as a state", all non-primarily financial tech companies wishing to issue stablecoins must undergo approval from a "Stablecoin Certification Review Committee" and are prohibited from conducting financial business using user data they possess. This means that Meta, Apple, and Google must first address "data sovereignty" and "financial function abuse" issues if they have stablecoin plans.
Overseas Stablecoins Encounter "Geopolitical Restriction Clauses" Again
Another controversial new clause in the draft is a compliance screening mechanism for overseas stablecoin issuers. The Treasury Department is authorized to propose three requirements for non-US issuers like Tether:
- Technical ability to cooperate with US law enforcement;
- Whether the country is a "compliant country";
- Whether there are sufficient assets to provide backing support.
This not only makes the US Treasury the de facto international stablecoin "distribution gatekeeper" but also leaves ample diplomatic and geopolitical operational space. Once diplomatic relations with a country deteriorate, this mechanism could even be used as a financial pressure tool, raising clear concerns about its political risks.
FDIC Absence, Underlying Mechanism Still Has Gaps
Despite increased transparency and prudent management requirements, the bill does not include payment-type stablecoins in the Federal Deposit Insurance (FDIC) system. It only requires issuers to submit bankruptcy disposal and asset isolation assessment reports within three years. This means that in the event of a large-scale bank run or a financial institution's collapse, stablecoin users will still find it difficult to obtain institutional "lender of last resort" guarantees.
What Does This Mean for the Crypto Industry?
Releasing Hundreds of Billions in Potential Funds
If the GENIUS Bill is ultimately passed, it will establish a federal-level regulatory foundation for legal stablecoin issuance in the United States, marking the first time one of the crypto industry's most important infrastructures is incorporated into the mainstream financial regulatory framework.
Currently, the stablecoin market value has reached approximately $250 billion, serving as the core infrastructure supporting crypto market liquidity, payment networks, and cross-border clearing. The compliance of stablecoins could potentially leverage hundreds of billions of dollars in new funds entering the market, accelerating the entry of more traditional financial institutions, including Wall Street banks and payment giants.
Market Structure Legislation Becomes the Next Battlefield
Despite significant breakthroughs in stablecoin regulation, the overall institutional construction of the crypto industry remains in its early stages, with legislative gaps still to be filled, especially in areas such as exchange regulation, token issuance, and the applicable scope of securities laws.
Coinbase CEO Brian Armstrong recently stated on the same stage with two stablecoin legislation promoters, Senators Gillibrand and Lummis: "Stablecoins are just the first step. What we need more is comprehensive market structure legislation."
This issue is more sensitive because it involves the core controversy of "whether tokens are securities".
Currently, the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have not yet reached a clear division of regulatory authority. During the Biden administration, the SEC repeatedly sued crypto platforms on grounds of "illegal securities issuance". However, when the Trump camp took office, they quickly announced "cancellation of all related lawsuits" and promised not to pursue further, raising concerns about changes in regulatory direction.
Deep Involvement of Trump Family Increases Legislative Political Risks
In the process of promoting the GENIUS Bill, the political game behind it cannot be ignored. The Trump family has been highly positioned in the crypto field in recent years, covering multiple sectors including Bitcoin mining, Non-Fungible Token, meme coin, stablecoins, and ETFs. Because of this, some Democratic lawmakers maintain a wait-and-see or even hostile attitude towards fully promoting crypto legislation, fearing they might "give a green light" to Trump-affiliated capital.
However, in the latest revised law, the "moral boundary" clause exempts the President and Vice President from the ban. Against the background of multiple tech-friendly individuals within the current Trump government deeply involved in Web3 policy shaping, this will undoubtedly become ammunition for political opponents to attack.
Lawyer's Perspective: Regulatory Clarity Will Initiate a New Phase of Stablecoin Development
For this, ChainCatcher exclusively interviewed industry professionals to analyze the actual impact of the GENIUS Bill on the industry.
Guo Yatao, a lawyer focusing on Web3 and crypto fields, stated that once the GENIUS Bill is implemented, it will bring long-awaited regulatory clarity to stablecoins, a key infrastructure. "Stablecoins are the blood of the crypto market. Everyone has been using them, but with unclear regulations, there was always uncertainty. Now that the framework is clear, with answers to core issues like reserve mechanisms, asset isolation, and issuance qualifications, this is a significant boost to market confidence."
He pointed out that the bill's significance lies not only in "providing guidelines for legal entities" but also in opening channels for traditional financial institutions. "In the past, it wasn't that they didn't want to participate, but they didn't know how. Now that the compliance pathway is clear, banks and payment giants are expected to enter massively, bringing not just funds, but also credit and infrastructure."
However, the lawyer also warned that stablecoin legislation is just the first step, "More complex issues are yet to come, such as exchange regulation and token classification in gray areas. The fact that stablecoins are first to be legislated indicates that both parties are beginning to find consensus on fundamental issues, but establishing a complete regulatory system is still a long way off."
Mao Jiehao, a senior lawyer at Shanghai Mankun Law Firm, also believes that the promotion of the GENIUS Bill is a signal of the increasingly formed Web3 regulatory system. "Mainstream countries promoting a compliant stablecoin framework will help clarify the responsibility boundaries and behavioral norms of all parties and will accelerate the integration of Web2 and Web3."
He further pointed out that the implementation of compliant stablecoins might trigger a short-term wave of converting legal tender into compliant stablecoins and stimulate the emergence of more application scenario projects, especially in DeFi and RWA (Real World Asset tokenization) tracks.
"For stablecoin issuers, the future competition will focus on who can provide more attractive use cases. They want users to exchange legal tender for their stablecoins, which requires real, stable interest-generating asset support. RWA is naturally a fitting direction," the lawyer added. "The ability to open up more landing scenarios" will become the key for stablecoin issuers to compete, and this application-driven competition will accelerate the maturity and differentiation of the stablecoin market.
Regulatory Shoe Drops, Next Steps Remain Unknown
Indeed, the GENIUS Bill provides an expected framework for stablecoin compliance. However, what truly determines whether the crypto industry can enter the mainstream financial system is not just the legal status of payment-type stablecoins, but whether the entire market structure can build a clear, unified, and robust regulatory framework.
Therefore, although the bill's chances of passing in the House of Representatives have significantly increased, final passage still requires multiple political checkpoints, including inter-chamber coordination and presidential signature. Industry insiders estimate that the most optimistic expected final passage time is not until the end of 2025.
Additionally, whether the United States can complete legislation on core mechanisms such as exchanges, token issuance, and cross-border capital flows will determine if a "second compliance wave" in the crypto industry can occur.
