The GENIUS Act, focused on guiding and establishing national innovation for US stablecoins, passed an important cloture vote in the US Senate with 66 votes in favor and 32 against. However, it is crucial to recognize that the bill has not yet become law. It will now progress to the Senate floor for discussions and potential changes.
An interesting aspect of the cloture vote was the significant shift in support for the GENIUS Act, as sixteen Democrats altered their votes to back the bill. These Democrats include Alsobrooks, Hassan, Warner, Schiff, Padilla, Slotkin, Blunt-Rochester, Cortez Masto, Fetterman, Gallego, Gillibrand, Heinrich, Lujan, Ossoff, Rosen, and Booker.
As reported by Eleanor Terrett, the bill is expected to advance to the Senate by tonight or Wednesday. Faryar Shirzad, Coinbase’s Chief Policy Officer, hailed the vote as a "historic early win," although there are still many steps ahead before stablecoin legislation becomes a reality. Senator Bill Hagerty, the sponsor of the bill, expressed optimism about the potential impact of the GENIUS Act on boosting demand for US Treasury bonds and strengthening the country's financial system.
Despite some positive reactions, the legislation has faced criticism. Senator Elizabeth Warren raised concerns about systemic risks associated with stablecoins and highlighted a lack of fundamental provisions in the GENIUS Act for financial stability. Economist Simon Johnson echoed these sentiments, emphasizing the need for robust regulatory oversight. Additionally, crypto commentator Richard Heart criticized the bill for potentially restricting innovation in decentralized finance by favoring traditional banking systems.
While the cloture vote marked a procedural achievement, the final passage of the bill remains uncertain. As the Senate gears up for the pivotal vote, the ongoing debate on stablecoin regulation continues to escalate, with significant implications for the future of digital finance in the US.