How the GENIUS Act Could Benefit Ripple’s RLUSD, USDC, USDT
The Senate has made a significant approach to the regulation of digital assets advancing the GENIUS Act, also known as the Guiding and Establishing National Development for U.S. Stablecoins Act, the first-ever crypto bill to pass through the chamber. The traction of the bill casts an essential question not only to the industry but also to regulators: What effect will the GENIUS Act have on stablecoin policy and how will it shape the U.S. crypto regulatory environment as a whole?
The GENIUS Act was enacted by a bipartisan majority, 18 Democrats voting in favor, and seeks to establish a monitoring framework of stablecoin issuance and utilization. The stablecoin bill is expected to benefit major players in the domain, including Tether (USDT), Circle’s USDC, and Ripple USD (RLUSD).
What is the GENIUS Act?
The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act is the first U.S. bill that regulates cryptocurrencies. It provides clarity and confidence in the use of stablecoins, which may encourage increased adoption and industry growth. According to its proponents, the bill will protect consumers, promote innovation, and hold bad actors accountable. It also introduces ethics-related measures, such as a ban on Members of Congress and their families profiting from stablecoin ventures. However, this restriction does not extend to the Trump family, which remains a point of political contention.
What Does the GENIUS Act Do?
At its core, the GENIUS Act establishes clear guidelines for “payment stablecoins” such as USDT, USDC, and RLUSD that are pegged to the U.S. Dollar (USD). These include:
- 1:1 backing to U.S. Dollar reserve and short-term treasuries with no rehypothecation allowed.
- Monthly reserve disclosure and mandatory annual audits for companies exceeding $50 billion in circulation.
- Federal-state dual licensing that allows issuers above $10 billion to be federally regulated while smaller ones adhere to state standards.
- Consumer protection, including legal redemption rights and bankruptcy preference for holders.
- Anti-Money Laundering (AML) and sanctions compliance under the Bank Secrecy Act.
As per reports, Senator Angela Alsobrooks (MD), an original cosponsor of the legislation, celebrated the vote as a major milestone: “Today marks the first time the Senate has ever passed comprehensive legislation to address digital assets.” Now, all eyes turn to the House of Representatives, where a parallel bill, the Stablecoin Transparency and Accountability for a Better Ledger Economy Act, has already cleared the Financial Services Committee.
The best way forward would be to reconcile the House version with the Senate GENIUS Act to have a unified vote. However, challenges remain. Internal deliberations exist on consolidating other crypto-related bills, including the Digital Asset Market Clarity Act, into the House proposal. Additionally, the 45th & 47th U.S. President Donald Trump has called for a clean bill with no add-ons or riders, which is likely to impede the bipartisan effort.
Market Action on New Stablecoin Bill
Industry stakeholders, such as the American Bankers Association, have echoed this sentiment by advocating for a fairer regulation that will foster innovation while safeguarding the financial system simultaneously. “We will continue to work with legislators to pursue a final stablecoin bill that embraces innovation without undermining our trusted financial system,” said Rob Nichols, ABA President and CEO.
Also Read: Circle Stock Surges Over 50% Since Senate Passes Stablecoin Bill
