GENIUS Act stablecoin bill passed key vote, now heads toward full Senate floor approval on 20 may.

Meanwhile, this stronger rules added: 1:1 reserves, monthly audits, and full redemption rights required.

A crucial vote in the Senate on Thursday passed a bill that would impose a new regulatory framework for stablecoins, a class of cryptocurrencies pegged to the value of traditional fiat currency, most likely setting up a final vote by the full Senate as soon as Friday morning.

The vote on the bipartisan GENIUS Act, which stands for “Generating Economic, Mobilizing Jobs, and Unlocking Stability Act,” came after a previous attempt to pass the bill on Monday failed due to concerns over weak consumer protections and the potential influence of former President Donald Trump.

However, after the bill’s authors—Sens. Bill Hagerty (R-TN) and Mark Warner (D-VA)—added amendments to address these issues, it was able to pass the key procedural vote in a 66-32 vote.

The updated bill includes several key provisions, such as requiring stablecoins to have full 1:1 fiat backing, undergo monthly audits, and provide clear redemption rules to users. These changes aim to eliminate any coins that operate in a shady or risky manner, ultimately rendering them useless, and create an environment where stablecoins are safer for both everyday investors and billion-dollar institutions.

After the vote, the bill now heads back to the House of Representatives, which will need to approve any amendments made by the Senate.

If the House does make any changes, the bill will then return to the Senate for a final vote before heading to Trump for his signature.

The bill’s passage comes amid growing interest in cryptocurrency regulation, with lawmakers from both parties working on legislation to set rules for the industry.

The House Financial Services Committee has also been working on legislation to regulate crypto, with Chair Maxine Waters (D-CA) focusing her bill on consumer protection and anti-money laundering issues.

The Senate vote on the GENIUS Act will be the final stage in a long legislative process that began earlier this year with the introduction of the bill in March.

The bill is also expected to include provisions for the oversight of stablecoins by the Federal Reserve and the Office of the Comptroller of Currency, as well as stricter rules for stablecoin issuers with over $50 billion in outstanding tokens.

The House is expected to focus its attention on Trump’s role in the bill, given his well-known support for stablecoin regulation and his administration’s efforts to create a U.S.-backed stablecoin.

Additionally, attention will be on any potential amendments to include rules for decentralized finance (DeFi) and the integration of the GENIUS Act with broader financial legislation.

The administration has consistently highlighted the importance of a U.S.-backed stablecoin as a tool to maintain the dollar’s global standing and enhance the efficiency of cross-border payments.

Moreover, Trump has voiced his support for stablecoin regulation, aligning with the broader political consensus on the need for oversight in the rapidly evolving crypto sector.

As the bill progresses, it will be crucial to monitor the actions of the House and any further amendments that might arise.

The final stage will involve Trump’s signature, which appears likely, considering his stance on stablecoin regulation and his administration’s initiative to create a USD 1 stablecoin.

The implementation of the bill’s provisions, including 100% reserve backing, monthly audits, and supervision by the Fed and OCC, will be key to ensuring a stable and trustworthy ecosystem for both large institutions and individual investors.

While a statement from the White House said Trump would sign the bill, the administration signaled potential problems with the bill in a May 7 memo from the Treasury Department.

The memo expressed concerns that the bill could undermine financial stability and create legal uncertainty.

It suggested deferring the legislation to allow for further study and input from financial regulators.

The administration also raised issues with the bill’s provisions for the Treasury secretary to mint a U.S.-backed stablecoin, arguing that it could create confusion with the existing monetary system.

Despite these concerns, the administration acknowledged the need for clear regulation of stablecoins and suggested that Congress could consider enacting a simpler bill focused on requiring full-reserve backing and tying stablecoins to the U.S. dollar.

The Treasury Department’s memo provides valuable insights into the administration’s thinking on cryptocurrency regulation and the potential implications of the GENIUS Act.

As the bill advances in the House, it will be interesting to observe how these concerns are addressed and how the final version of the bill takes shape.

With the Senate's passage of the bill and the House's expected approval, the stage is set for Trump's signature and the subsequent implementation of the bill's provisions.

This development could have far-reaching consequences for the cryptocurrency industry and the broader financial landscape.

The Senate's vote on Thursday to pass a bill imposing a new regulatory framework for stablecoins came after a previous attempt to pass the bill on Monday failed due to concerns over