Bitcoin has reached a new all-time high as it breached the $110,000 cap following the advancement of a key crypto bill in the United States Senate, which has received bipartisan support, and is expected to aid those running crypto businesses.
The bill, called the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, has advanced in the US Senate, after some Democrat members who had initially opposed it, joined their Republican colleagues in supporting the bill, which regulated primarily stablecoin.
Bitcoin has fallen last month briefly over geopolitical uncertainties following Trump’s tariff-induced assault on many countries, triggering fears of a global economic turmoil. However, with some of those concerns reducing, after events like the US signing a trade deal with China, the digital currency has been gaining momentum. The GENIUS Act played a further role in its upward surge.
While the bill has received support from some Democrat members because of which it moves forward in the US Senate, there are growing concerns that US President — once a crypto sceptic — and some of his supporters from the crypto and tech industry could personally benefit from it. Trump and his wife Melania have issued their own meme coins and have an active interest in the crypto market going up.
At its core, the GENIUS Act focuses on regulating stablecoins, a type of cryptocurrency that is pegged to more predictable assets like the US dollar. Among others, it also allows big tech companies to issue stablecoins, in what is being seen as a big win for many of Trump’s supporters from the industry, who threw their weight behind him in the run-up to the Presidential bid and have continued their support to him since his reelection.
The bill says that issuers must comply with anti-money laundering (AML) and anti-terrorism regulations, as well as privacy requirements under existing banking laws. It requires that crypto issuers must fully back stablecoins with fiat currency or high-quality liquid assets at a 1:1 ratio. They would also have to maintain reserves separate from operational funds and disclose these reserves publicly, with regular third-party audits.
Mark R Wright, Democrat Senator from the state of Virginia, who has supported the bill said that while many lawmakers have concerns about the Trump family’s use of crypto technologies to “evade oversight, hide shady financial dealings, and personally profit at the expense of everyday Americans”.
“But,” he said in justification of his support to the bill, “we cannot allow that corruption to blind us to the broader reality: blockchain technology is here to stay. If American lawmakers don’t shape it, others will – and not in ways that serve our interests or democratic values. Innovation in this space is happening, with or without us. We have a responsibility to ensure it happens safely, transparently, and in a way that advances U.S. economic and national security interests. The GENIUS Act will help get us started”.
Even though the GENIUS Act received bipartisan support in the US Senate, some Democrat members came down heavily against it.
As per a fact sheet released by Senator Elizabeth Warren, Ranking Member of the US Senate Committee on Banking, Housing and Urban Affairs, said, “A strong bill would ensure that consumers enjoy the same consumer protections when using stablecoins as they do when using other payment systems, close loopholes that enable the illicit use of stablecoins by cartels, terrorists, and criminals, and reduce the risk that stablecoins take down our financial system. The GENIUS Act does not meet those minimum standards”.
Warren said that while industry estimates suggest that passing the GENIUS Act could help the stablecoin market grow 10-fold over the next three years to a $2 trillion market, Scaling up the stablecoin market without adequate safeguards risks increasing the “illicit use of stablecoins, which already account for over 60% of unlawful crypto transactions”.
There are also concerns around potential conflict of interest for US President Donald and his growing cryptocurrency firm, could inappropriately benefit from crypto. “This bill provides even more opportunities to reward buyers of Trump’s coins with favors like tariff exemptions, pardons and government appointments,” Warren said in a speech ahead of the vote.
Another concern in the legislation is that it allows big tech companies to issue stablecoins. Companies like Meta had previously tried to make an unsuccessful foray into the crypto industry. As per the New York Times, some changes have been made to the bill to assuage concerns around the involvement of tech companies, requiring that they seek approval from a regulatory committee before issuing their own stablecoins.
While that appeared to assuage concerns of some Democrat members, not everyone was on board. “Despite new language on this issue, the final bill fails to prohibit Big Tech companies from issuing stablecoins. By tearing down the 200-year separation between banking and commerce, this bill undermines competition, threatens financial stability, and erodes financial privacy. While the bill purports to place restrictions on some Big Tech companies’ ability to issue stablecoins, those restrictions are riddled with straightforward and easily identifiable loopholes,” Warren said in her fact sheet.
