The U.S. Senate paves the way for stablecoins, marking a milestone victory for Trump and encryption giants.

Written by: Bao Yilong, Wall Street Watch

The U.S. Senate has passed stablecoin legislation, establishing regulatory rules for cryptocurrencies pegged to the dollar, marking a milestone victory for the crypto community and Trump.

On June 17 local time, the U.S. Senate passed the GENIUS Act with 68 votes in favor and 30 against. Analysts say this voting result is the most concrete return for the cryptocurrency industry after investing hundreds of millions of dollars to elect a "crypto-friendly" Congress. The crypto giants that invested heavily in last year's elections have already developed similar plans for the 2026 midterm elections.

Tim Scott, the Republican from South Carolina and chairman of the Senate Banking Committee, stated in a statement on Tuesday that the legislation "brings clarity to an industry that has been shrouded in uncertainty."

The official name of the bill is the "Guidance and Establishment of a National Stablecoin Innovation Act of America" (GENIUS), which will soon be submitted for a vote in the House of Representatives. The House will decide whether to adopt the Senate's version or push its own stablecoin bill, the "STABLE Act," which has differences in regulation and treatment of foreign issuers.

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Previously reported by Wall Street Insights, according to the provisions of the bill, stablecoins pegged to the dollar must hold an equivalent amount of short-term government debt or similar products as reserves and are subject to oversight by state or federal regulatory agencies in the United States. It is worth noting that these stablecoins will not be protected by federal deposit insurance.

According to media reports, this new regulation opens the door to opportunities for multiple industries:

Retailers and the payment industry: Industry supporters hope that stablecoins can become a mainstream payment method. Retailers welcome the bill, believing it offers a cheaper and faster transaction processing method compared to traditional banking products like credit cards and checks.

Large Banks: While small banks are concerned about deposit outflows and a tightening of credit channels, large banks are considering issuing their own stablecoins to generate profits through interest earned on reserves. Stablecoins have become a lucrative business, with leading issuer Tether Holdings SA earning billions of dollars through its reserves.

Technology and other non-financial giants: If the bill ultimately becomes law, technology companies and other large non-financial enterprises could also issue their own stablecoins, which may disrupt the long-standing barriers between finance and business.

The game before the legislative finish line

Although the Senate has made a breakthrough, the legislative path is not yet complete.

Currently, the House of Representatives is advancing its own legislation, which includes a more comprehensive measure aimed at regulating the broader cryptocurrency market. House members must now decide whether to directly adopt the Senate's bill or to negotiate a compromise.

Reports indicate that a Republican House aide stated that the two bills on stablecoins and market structure are necessary to create a comprehensive and lasting framework for digital assets, and they will continue to work with colleagues to advance the passage of both bills.

However, it has been reported that several Democrats, led by Senator Elizabeth Warren, believe that the stablecoin bill provides insufficient protection for consumers and the financial system in the event of a publisher's collapse, potentially leading to customer losses and triggering a need for taxpayer bailouts. Warren, as a senior Democratic member of the Senate Banking Committee, stated on Tuesday that the bill would "enhance the value of Trump's corrupt behavior."

However, the warning from the Senate is also very clear. Senior Republican member of the Banking Committee and North Carolina Senator Thom Tillis warned the House not to amend the Senate bill. He predicted that the Democrats would block any amendments:

If the House sends it back after modification, it will die in the womb.

The finish line of this legislative marathon is just around the corner, but the last mile is often the most treacherous.