GENIUS Act Passes Cloture Vote
The US Senate cleared a critical procedural hurdle for the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, passing a cloture vote with 66 votes in favor and 32 against. This signifies significant progress, though the bill still requires full Senate approval before becoming law. Debate and potential amendments are expected.
GENIUS Act Clears Cloture
A surprising development was the support of sixteen Democrats who switched their votes to back the bill. This marked a considerable shift in momentum. The following senators changed their votes to support the bill: Alsobrooks, Hassan, Warner, Schiff, Padilla, Slotkin, Blunt-Rochester, Cortez Masto, Fetterman, Gallego, Gillibrand, Heinrich, Lujan, Ossoff, Rosen, and Booker.
According to Crypto In America host Eleanor Terrett, the bill is expected to proceed to the Senate floor for final consideration by Wednesday.
Key Stakeholders React
Coinbase’s Chief Policy Officer, Faryar Shirzad, hailed the vote as a "historic early win," emphasizing that, while further steps are needed, stablecoin legislation is moving closer to reality. He noted crypto’s growing bipartisan appeal in Congress.
Senator Bill Hagerty, the bill's sponsor, expressed optimism, predicting the GENIUS Act could increase demand for US Treasury bonds by over $1 trillion, potentially strengthening the US financial system.
Concerns and Criticism
However, the GENIUS Act has faced sharp criticism. Senator Elizabeth Warren warned of systemic risks, echoing concerns raised by Nobel Prize-winning economist Simon Johnson, who cited potential instability from stablecoin runs and inadequate safeguards for foreign issuers.
Crypto commentator Richard Heart criticized the bill, arguing it favors traditional banking, potentially stifling DeFi innovation by limiting stablecoin issuance to licensed entities and barring interest payments to holders. He highlighted this as a potential "stablecoin crackdown" that protects established financial institutions.
The Path Forward
While the cloture vote represents a procedural victory, significant divisions remain. The bill's final passage remains uncertain. The Senate debate, as the bill heads for a final vote, will continue to shape the future of digital finance regulation in the US. Codeum, a leading blockchain security and development platform, offers services including smart contract audits, KYC verification, custom smart contract and DApp development, tokenomics and security consultation, and partnerships with launchpads and crypto agencies to help navigate this evolving regulatory landscape.