Landmark Stablecoin Bill Passes Senate with Overwhelming Bi-Partisan Support

On June 17, 2025, the US Senate, in a bipartisan 68-30 vote, approved the Guiding and Establishing National Innovation for US Stablecoins (“GENIUS”) Act, marking the first time either chamber of Congress has ever passed comprehensive legislation devoted exclusively to the regulation of payment stablecoins. The Senate-passed GENIUS Act will now make its way to the House, where leaders will decide whether to adopt the Senate text or seek a conference to reconcile differences between the GENIUS Act and the House Financial Services Committee’s own stablecoin bill. 

Senate passage of the GENIUS Act substantially advances the United States toward a unified, modern framework for dollar-backed stablecoins. While the House must still act, the legislative momentum generated by a 68-vote supermajority signals that statutory guardrails for stablecoin issuance are within reach. 

Key Features of the GENIUS Act

The GENIUS Act defines a “payment stablecoin” as a digital asset that is designed to be used as a means of payment or settlement, and which the issuer is obligated to “convert, redeem, or repurchase for a fixed amount of monetary value,” that is neither a national currency nor a security. To be considered a payment stablecoin, the issuer must also represent it will maintain or create the reasonable expectation that it will maintain a “stable value relative to the value of a fixed amount of monetary value.” The Act explicitly states that: (i) a payment stablecoin is not a security or commodity and (ii) a payment stablecoin issuer is not an investment company. Under the GENIUS Act, both domestic and international payment stablecoin issuers may not pay any form of interest or yield, whether in cash, tokens, or other consideration, to a holder of a payment stablecoin for merely holding it.

The GENIUS Act allows banks and certain nonbank financial institutions to issue stablecoins. Public companies that are not predominantly engaged in one or more “financial activities” may issue a payment stablecoin only after receiving unanimous approval from the Stablecoin Certification Review Committee (“SCRC”), a three-member body chaired by the Secretary of the Treasury. Stablecoin issuers whose stablecoins have more than $10 billion in consolidated total outstanding issuance will be regulated by the Federal Reserve (for banks) and the Office of the Comptroller of the Currency (“OCC”) (for nonbanks); issuers below that threshold will have the option of being regulated by their state’s own regulatory framework (rather than either the Federal Reserve or OCC, as applicable)—if the state’s regulatory framework is “substantially similar” to its federal counterpart. The Act does not define “substantially similar.” Instead, it leaves that determination to the states and requires state regulators to certify to the SCRC that their regulations meet the Act’s “substantial similarity” standard.

Permitted payment stablecoin issuers will be allowed to engage in a defined number of activities, which include issuing and redeeming payment stablecoins, managing stablecoin reserves, providing custodial or safekeeping services, and undertaking other functions to directly support the issuance and redemption of payment stablecoins. Stablecoins of non-US issuers may not be made available in the United States absent a showing that they are subject to a “comparable” reciprocal regulatory framework and comply with other registration and liquidity reserve requirements.

If signed into law, the Act would impose stringent regulatory requirements on issuers. For example, permitted payment stablecoin issuers would be: (i) subject to the Bank Secrecy Act’s monitoring, recordkeeping, and reporting requirements; and (ii) required to maintain reserves fully backed by high-quality liquid assets, such as US Treasury securities and cash deposits, ensuring a 1-to-1 backing for outstanding stablecoins. Additionally, if a stablecoin issuer receives, acquires, or holds customers’ stablecoins, cash, private keys, and “other property,” the issuer must segregate those assets and take steps to protect them against claims of creditors and may not (except in limited circumstances) commingle customers’ stablecoins, cash, private keys, and “other property.” 

The GENIUS Act further imposes monthly reporting requirements to permitted payment stablecoin issuers, requiring them to publish on their website monthly the total number of outstanding stablecoins and the amount and composition of the required reserves. OCC-regulated entities would have additional reporting and disclosure obligations upon the OCC’s request. 

Next Steps

The House will decide whether to bring the Senate bill directly to the floor for a vote or work to push its parallel bill, the Stablecoin Transparency and Accountability for a Better Ledger Economy Act of 2025. The key differences between the House and Senate approaches include consumer-protection provisions, issuer size thresholds, and the role of state regulators.

Democratic and Republican Senators offered more than 100 amendments to the GENIUS Act; Representatives in the House are likely to offer their own. Supporters of the GENIUS Act proclaim it will provide long-awaited clarity to the US stablecoin market, foster innovation in real-time payments, and reinforce the US dollar’s position in the world reserve currency market. Opponents cite concerns over consumer protection, national-security risks, and perceived conflicts of interest involving government officials. 

Implications for the Industry

If enacted, the GENIUS Act would represent one of the most significant legislative developments in the United States for the digital assets industry and would pave the way for banks and other financial institutions to issue digital assets within clearly-defined compliance guardrails. 

As the GENIUS Act advances to the House with bipartisan support, financial firms interested in joining or entering the stablecoin arena will be closely monitoring the legislation for any potential compliance obligations, licensing considerations, and operational changes necessary to be among the first to issue Congressionally-authorized digital assets in the United States.

This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Andrew J. Geist, an O’Melveny partner licensed to practice law in New York; James M. Harrigan, an O’Melveny partner licensed to practice law in the District of Columbia and Maryland; Sid Mody, an O’Melveny partner licensed to practice law in Texas; Scott Sugino, an O’Melveny partner licensed to practice law in California; AnnaLou Tirol, an O’Melveny partner licensed to practice law in California and the District of Columbia; Wenting Yu, an O’Melveny partner licensed to practice law in California and New York; and Juan Antonio Solis, an O’Melveny associate licensed to practice law in Texas, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.

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