GENIUS Act Blocked in Senate as Stablecoin Oversight Faces Scrutiny

The GENIUS Act, a bill focused on stablecoin regulation, failed to advance in the U.S. Senate on May 8, 2025. The official name of the bill is the Guiding and Establishing National Innovation for US Stablecoins Act. Democrat lawmakers voted 49–0 against the bill, while 48 Republican senators supported it. The bill required 60 votes to move forward under Senate rules. Its failure ended a key push to regulate stablecoins at the federal level. Several Democrats who had previously supported the GENIUS Act, including Ruben Gallego, Mark Warner, Lisa Blunt Rochester, Andy Kim, Kirsten Gillibrand, and Angela Alsobrooks, withdrew their support during the vote. This reversal played a central role in blocking the bill’s progress. Stablecoin Bill Criticized Over AML and Enforcement Gaps In a joint statement, Gallego and other senators pointed to key issues in the GENIUS Act. They said the bill lacked strong anti-money laundering (AML) rules and did not provide adequate oversight for foreign stablecoin issuers. They also said the enforcement tools included in the bill were not strong enough. National security and financial system risks were among their other concerns. “We recognize that the absence of regulation leaves consumers unprotected and vulnerable to predatory practices,” the lawmakers said. These lawmakers said more changes were needed before they could support the stablecoin legislation. Meanwhile, Republican Senator Pete Ricketts criticized the vote outcome. He said the opposition prevented progress on regulatory clarity for stablecoins. Revised GENIUS Act Adds Stablecoin Oversight Changes After the failed vote, a revised version of the GENIUS Act appeared. It now has support from four Republican senators: Bill Hagerty, Cynthia Lummi s, Tim Scott, and Dan Sullivan. The new draft no longer lists Democrats Kristen Gillibrand and Angela Alsobrooks as co-sponsors. The updated GENIUS Act includes expanded U.S. jurisdiction over foreign stablecoin issuers like Tether that operate in the U.S. It also updates the legal definitions of digital asset service providers and changes the rules for reserve assets backing stablecoins. Tether CEO Paolo Ardoino commented on the revised bill. He said the company supports regulation and looks forward to working with U.S. lawmakers. Ardoino stated. Stablecoin Market Impact and Industry Reactions Bitwise Chief Investment Officer Matt Hougan reacted to the vote. He said the failure to pass stablecoin legislation could affect crypto market development. He also noted that altcoins may face more volatility if the legal framework remains unclear. “If stablecoin and market structure legislation grind to a halt in DC, it’s going to be a long summer for non-bitcoin crypto assets,” Hougan wrote on X. Bo Hines, Executive Director of the President’s Council of Advisers on Digital Assets, also commented. He said the Senate missed an opportunity to bring structure to the digital asset space. Hines wrote. The revised GENIUS Act is still under review. Lawmakers may continue discussions as they seek agreement on stablecoin oversight, AML requirements, and enforcement authority.