The U.S. Senate took the initial steps toward final approval of its first major crypto legislation

As the crypto world watches the Senate reverse what had long been a crypto-resistant stance, the House of Representatives has also scored a pair of key votes

The U.S. Senate took the initial steps toward final approval of its first major crypto legislation as members opened voting Wednesday on the bill to set standards for U.S. stablecoin issuers, clearing the highest procedural hurdle with a 68-30 result.

The Senate vote on the GuIding and Establishing National Innovation for U.S. Stablecoins of 2025 (GENIUS Act) reached the high bar to move to the final vote with support from both parties, and the chamber is now expected to approve the bill later Wednesday. The legislation will create a regulatory framework for stablecoins, digital tokens pegged to the value of the dollar or other assets, in order to facilitate their use in the U.S. financial system.

The bill, which passed out of the Senate Banking Committee in June, will now go to the House of Representatives for approval. The lower chamber of Congress is also working on legislation to provide comprehensive regulation for the cryptocurrency industry.

The Senate vote comes after months of debate and negotiation among lawmakers, who have been grappling with how to balance innovation with investor protection as the cryptocurrency market has grown rapidly in recent years.

The Senate is now on the way to clearing the legislation with wide bipartisan support.

"This would strengthen our fiscal position and cement the dollar's status as the world's reserve currency," said Senator Bill Hagerty, the GENIUS Act's sponsor, as he asked his colleagues for support on the bill. "If we fail to act now, not only will these benefits slip away, we'll also fall behind in global competitiveness without a regulatory framework."

But Senator Elizabeth Warren, the ranking Democrat on the Senate Banking Committee, took to the Senate floor to blast the GENIUS Act.

"The GENIUS Act lacks the basic safeguards necessary to ensure that stable coins don't blow up our entire financial system," the Massachusetts senator said. "The bill permits stablecoin issuers to invest in risky assets and allows them to engage in risky non-stablecoin activities like private credit or derivatives trading."

The legislation also includes provisions that would allow non-bank companies to apply for federal charters to issue stablecoins, which Warren said "would create new avenues for shadow banking activity."

"This fundamental weakness in the bill is no accident. It's the result of persistent lobbying by industry groups who are more interested in maximizing their own profits than in protecting the financial system," she added.

After the vote to clear the bill for final passage, Warren had a sharp message for fellow members of her party, many of whom were set to support the bill, that they "should show a little spine" and insist that Republicans allow some of the amendments pushed earlier by Democrats.

"We could be standing here today with a bill that provides critical consumer protection, meaningful oversight of the financial system and a framework for innovation," Warren said. "Instead, we'll be voting on a bill that does none of these things."

The House is working on legislation of its own to create a regulatory framework for cryptocurrencies, and it remains to be seen whether the two chambers of Congress will be able to agree on a final bill before the end of the year.

The Senate bill is a modified version of the Stablecoin TEFRA Act of 2023, which was introduced earlier this year by Senators Tim Scott and Bill Hagerty. The bill would create a regulatory framework for stablecoins, digital tokens pegged to the value of the dollar or other assets, in order to facilitate their use in the U.S. financial system.

The House Financial Services Committee approved the Digital Asset Market Clarity Act on Tuesday with a bipartisan vote of 39-8. The bill, which is more relevant to the broader crypto markets, passed the committee in a previous session of Congress but stalled in the full House.

Later on Tuesday, the House Ag Committee also approved the bill in a vote of 25-8. The bill will now go to the full House for a vote, possibly as early as next week.

The Senate bill is being tracked by many in the crypto industry, as it could set the stage for the U.S. to become a global hub for crypto innovation.

The bill is also being watched closely by members of the administration, who have expressed concern about the risks posed by stablecoins to the financial system. Treasury Secretary Janet Yellen has said that stablecoins could be used for money laundering and other illicit activities, and she has called for Congress to move quickly to regulate the industry.

"The bipartisan support for this legislation is a testament to the importance of providing clear and concise regulation for this emerging technology," said Tom Emmer, the bill's sponsor in the House. "We need to act now to ensure that the U.S. remains a leader in the global financial system."

Crypto lobbyists in Washington argue alongside their lawmakers allies that both bills are needed to properly regulate the industry in the U.S.

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