The Senate’s passage of the GENIUS Act on June 17, 2025, introduces a federal framework requiring stablecoins to be backed 1:1 by liquid assets like U.S. dollars or Treasury bills, a move supported by a 68-30 bipartisan vote, driven by a $119 million crypto industry lobbying effort in 2024 elections, per Reuters.
This legislation, championed by Senator Bill Hagerty, could propel the stablecoin market to $3.7 trillion by decade’s end, potentially reducing U.S. borrowing costs by boosting Treasury demand, as Treasury Secretary Scott Bessent noted, though critics like Senator Elizabeth Warren warn of risks to financial stability and privacy.
Historical context reveals a shift from the 2022 Tether de-pegging incident, which had minimal market impact due to its scale, to a 2023 USD Coin reserve exposure at Silicon Valley Bank, highlighting the need for regulation as stablecoin usage surged 50% annually from 2020-2024, per CoinGecko data.
