TL;DR Breakdown
- Congress is considering the GENIUS Act this week, which could establish a federal framework for stablecoin regulation.
- The bill introduces a licensing process for stablecoin issuers and sets reserve requirements to protect consumers.
- It proposes a dual regulatory system where large issuers are federally supervised and smaller ones remain under state oversight.
This week, Congress faces a critical moment as it considers new rules for stablecoins and digital asset markets. The GENIUS Act, backed by key industry voices, could establish a clear federal framework for stablecoin regulation. With time running short before the August recess, lawmakers must act quickly to shape the future of digital finance.
Stablecoin Regulation Gets Coinbase CEO Endorsement
The GENIUS Act proposes a federal licensing process for stablecoin issuers to ensure uniform compliance and oversight. Larger issuers would face federal supervision, while smaller ones could operate under state oversight. The bill also mandates issuers to hold adequate reserves to protect consumers in case of market disruptions.
Supporters argue the dual-regulatory structure can balance innovation with financial safety. The Senate must secure 60 votes to begin formal debate and move the bill forward. Legislators say the GENIUS Act could provide long-needed clarity for both issuers and regulators.
Coinbase CEO Brian Armstrong has urged the Senate to start deliberations on the bill without further delay. He believes clear regulation will position the U.S. to lead in global digital asset adoption. The bill’s progress comes as the House shows momentum on related policy through the FIT21 framework.
Congress has a real opportunity this week to advance stablecoin and market structure legislation. We strongly support the Senate starting debate on the GENIUS Act — and we need 60 votes to get there. We also welcome House efforts to build on FIT21’s momentum. Both chambers need…
— Brian Armstrong (@brian_armstrong) May 6, 2025
Stablecoins May Reshape Global Dollar Use
A new report from the U.S. Treasury Department projects the stablecoin market could expand to $2 trillion by 2028. This growth likely comes from increased institutional demand, more real-world uses, and tokenized financial products. Treasury officials attribute part of this growth to expected regulatory clarity.
The report outlines how stablecoins could reduce traditional bank deposit volumes over time. As stablecoins often hold short-term government debt, demand for those securities may pull funds from bank deposits. Banks may need to raise deposit rates or change strategies to remain competitive.
The Treasury views stablecoins as potential rivals to bank operations and important tools for spreading the dollar globally. It warns that the financial system could face unintended consequences without a solid regulatory base. Lawmakers are under pressure to address these risks before the legislative calendar narrows.
FIT21 Momentum Boosts GENIUS Act Progress
The GENIUS Act has gained new urgency as bipartisan lawmakers aim to finalize digital finance rules. With limited time before the August break, committees are working to fast-track the bill’s progress. Industry leaders continue to press for swift and decisive legislative action.
House lawmakers are building on recent gains from the FIT21 framework to complement Senate initiatives. Congressional staff are coordinating efforts to align language between the two chambers. The goal is to ensure a comprehensive, enforceable framework that promotes innovation and consumer protection.
Advocates believe passing this legislation now can give the U.S. a competitive edge in digital financial systems. Stakeholders emphasize that delaying action could push innovation to less-regulated markets. The coming weeks are likely to determine the trajectory of U.S. stablecoin policy.
