TL;DR
- The United States Senate has broken a filibuster and advanced the GENIUS Act — the first comprehensive federal framework regulating stablecoins. The bill is now headed to the Senate floor.
- With the total market cap of stablecoins hovering around $232 billion and growing, the bipartisan bill sets standards for reserves, audits, disclosures, and law enforcement compliance.
- Chainalysis’ advanced blockchain tooling can help issuers and regulators operationalize compliance and enforcement under the new law.
In a 66-32 vote, the United States Senate has defeated a filibuster, advancing the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act — the first comprehensive federal regulatory framework for stablecoins.
“The bipartisan GENIUS Act will provide regulatory clarity to this important industry, keep innovation on shore, add robust consumer protection, and reaffirm the dominance of the U.S. dollar,” said Sen. Kirsten Gillibrand (D-NY) who co-sponsored the bill along with Sen. Bill Hagerty (R-TN), Chairman Tim Scott (R-SC), Sen. Cynthia Lummis (R-WY) and Sen. Angela Alsobrooks (D-MD).
The legislation arrives at a time of historic growth for the stablecoin ecosystem, as stablecoins now account for the majority of on-chain transaction volume.
Charting the rise of stablecoins
Introduced in 2014, stablecoins were designed to combine the stability of fiat currencies with the speed and transparency of the blockchain. While initially used for crypto trading, use cases have expanded greatly — with fiat-pegged stablecoins now powering cross-border payments, serving as a store of value, and unlocking global access to U.S. dollar denominated assets.
Since 2020 in particular, stablecoins have seen significant growth in both issuance and adoption — with the total market cap approaching $232 billion as of May 2025.
Beyond market cap growth, we can also visualize how the role of stablecoins is expanding. The use case index below tracks stablecoins across three primary functions: as a store of value, trading instrument, and payment tool.1
Trading activity remains the most volatile and is also highly responsive to macroeconomic and political events. For example, the notable spike in trading use in late 2024 corresponds with the U.S. presidential election — a period marked by heightened trading activity.
Meanwhile, the use of stablecoins as a store of value is showing sustained momentum, suggesting continued interest from users seeking dollar-denominated stability. Additionally, stablecoin adoption as a payment method has continued on an overall upward trajectory, indicating growing real-world utility for everyday transactions.
A framework for consumer protection and national security
At its core, the GENIUS Act is both a consumer protection and national security measure — bringing long anticipated federal oversight to the stablecoin market. It introduces clear rules and compliance expectations for stablecoin issuers as well as platforms listing stablecoins, all of which are aimed at safeguarding users and the broader financial system.
Consumer protection provisions
- Full reserve backing with U.S. dollars, short-term Treasuries, or similarly liquid assets
- Monthly public disclosures of reserve composition
- Annual financial audits for issuers with market capitalizations exceeding $50 billion
- Marketing restrictions (e.g. prohibiting the use of “USG”, United State Government” or “legal tender” as part of materials and naming conventions)
National security provisions
These provisions balance security measures with practical implementation requirements.
- Bank Secrecy Act compliance
- Anti-money laundering (AML) and sanctions programs
- Transaction monitoring and recordkeeping
- Customer identification and enhanced due diligence
- Suspicious activity reporting
- Technical enforcement capabilities
- Issuers must demonstrate the ability to freeze or burn tokens
- Non-compliant foreign issuers may be barred from U.S. markets
- Sanctions enforcement coordination
- The Treasury Secretary must coordinate with issuers, where feasible, before blocking transactions involving foreign entities
As stablecoin adoption accelerates and regulations like the GENIUS Act take effect, both issuers and regulators need trusted tools to build safe, transparent, and compliant markets. The Act introduces foundational rules — from strict AML requirements and reserve standards to novel oversight mechanisms — but also includes some of the more debated provisions, such as a ban on yield-bearing stablecoins and certain restrictions on large technology firms acting as issuers. These elements are central to the ongoing policy conversation and signal where scrutiny will likely intensify if implemented.
Chainalysis enables compliance, oversight, and market trust
Chainalysis Sentinel empowers token issuers to monitor their ecosystems, mitigate risk, and comply with evolving global regulations. From initial issuance to secondary market activity, Sentinel offers:
- Real-time alerts on suspicious activity
- Automated address freezing and blocklisting via API
- End-to-end monitoring across 35+ behavioral risk categories
- Integrated workflows with KYT for issuance and redemption oversight
Meanwhile, regulators and supervisors can rely on Chainalysis to enhance oversight and enforcement. We deliver both macro and granular insights into digital asset flows at global and local levels, helping authorities detect illicit activity and flag high-risk entities through clear, actionable alerts. Investigative tools and real-world entity labeling support robust AML/CFT enforcement, while analytics on transaction volumes, digital asset firm interconnectivity, and stablecoin usage provide critical visibility into market stability. Additionally, Chainalysis offers expert training, tailored risk assessments, and strategic guidance to support the design and supervision of effective regulatory frameworks.
Whether you’re overseeing compliance or building it into your ecosystem from the ground up, Chainalysis delivers a shared foundation of trust between issuers and regulators.
U.S. stablecoin regulation in a global context
The vote on the GENIUS Act comes as the international push to regulate stablecoins intensifies. The stablecoin provisions of the European Union’s Markets in Crypto-Assets Regulation (MiCA) took effect in June 2024, while jurisdictions like Singapore, Hong Kong, the UAE, and Japan have also implemented their own regulatory frameworks for stablecoins.
In last year’s Geography of Cryptocurrency report, we noted that regulatory ambiguity in the U.S. was driving stablecoin activity toward offshore, less-regulated venues — even as U.S. adoption surged. The U.S. commands the lion’s share of overall stablecoin inflows by country.
Chainalysis CEO Jonathan Levin praised the GENIUS Act as a milestone for responsible innovation. “The Senate is nearing a defining moment for the future of digital assets. This legislation provides an opportunity to deliver long-needed regulatory clarity while reinforcing the United States’ competitive edge in blockchain innovation,” said Levin. “The GENIUS Act strikes the right balance: empowering regulators to manage risk while giving issuers confidence to innovate at scale. Along with Chainalysis providing tools to monitor ecosystem integrity, this framework lays the foundation for a safer, more competitive digital asset environment and ensures the U.S. sets the global standard for stablecoin regulation. We strongly urge Congress to pass this legislation.”
What’s next?
With the filibuster overcome and the bill advancing to a full Senate vote, this marks a pivotal moment for legislation that would provide well-defined standards and federal oversight for the bedrock of the digital assets space. By introducing clear regulatory parameters, the GENIUS Act could drive broader adoption of stablecoins across global financial systems — from cross-border payments to digital settlement rails.
If approved by both chambers of Congress, the bill will proceed to President Trump for signature and could become law later this year. For stablecoin issuers, financial institutions, regulators, and consumers, this legislation presents a meaningful opportunity to position the United States to lead the next phase of stablecoin innovation on a global scale.
Endnotes
[1] In this context, “payments” refers to the value received by merchant services through stablecoin transactions. “Trading” captures trading volume involving stablecoin pairs on centralized exchanges (CEXs). “Store of value” is measured by stablecoin balances held in unattributed wallets, indicating long-term holding behavior rather than active use.
This material is for informational purposes only, and is not intended to provide legal, tax, financial, or investment advice. Recipients should consult their own advisors before making these types of decisions. Chainalysis has no responsibility or liability for any decision made or any other acts or omissions in connection with the use of this material.
Chainalysis does not guarantee or warrant the accuracy, completeness, timeliness, suitability or validity of the information in this report and will not be responsible for any claim attributable to errors, omissions, or other inaccuracies of any part of
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