The Senate Genius Law bill, designed to establish stable federal rules, faces resistance from key Democrats, putting the broader cryptographic outlook at 2025.
The US National Innovation Guidelines and Established Stablecoins Act (Genius Act) moved forward with bipartisan support from the Senate Banking Committee in March.
However, nine Senate Democrats recently announced they would oppose solidification without implementing the necessary changes, hampering legislative progress.
Galaxy Digital and Share The failure to pass the Genius Act by head of researcher Alex Thorne allowed the reversal of all remaining cryptography laws under consideration in 2025.
The bill was seen as a fundamental component of the broader regulatory agenda, providing a template for consumer protection, institutional participation, and cross-border compliance.
The end of this law could leave stubcoin issuers operating without a uniform standard and continue the regulatory uncertainty that restricts the adoption of digital dollar measures.
Proposals to integrate blockchain-based payment rails with traditional financial infrastructure will also stall.
Democratic pushback
Despite the bipartisan momentum, nine Democrat senators, including five banking committee members who were the first to support the bill, issued a joint statement on May 3, outlining five unresolved areas.
The latest provisions in the May 1 draft attempt to address these concerns. These include expanded money laundering obligations, national security exemption mechanisms, increased surveillance of foreign issuers, and penalties of up to $1 million per day for violations.
The senator warned that he would not support advances in the law to the Senate floor without reinforcement to address these issues.
The bill also gives the Ministry of Finance the authority to designate a foreign jurisdiction compliant with and revoke its status in a 90-day transition window.
Structure of monitoring and issuer obligations
Under the Genius Act, the issuer must maintain a full, high-quality liquid reserve, usually the US Treasury Department or insurance deposit, supporting a 1:1 for liabilities.
They are prohibited from offering products that include harvest volumes and must comply with customer verification, suspicious activity monitoring, and AML program requirements.
The Publisher will be subject to federal or federally accredited state surveillance, depending on the issuance scale. Federal regulations thresholds are issued by Stablecoins over $10 billion.
The bill designates key federal regulators in the sector, including the Secretary of Currency, the Federal Reserve, the Federal Deposit Insurance Corporation, and the National Credit Union Agency.
At the same time, the law allows the Ministry of Finance to coordinate interoperability with foreign frameworks. The bill also prohibits undelegated issuers from entering the US market after a three-year grace period.
Sponsors continue to engage in negotiations, but the natural impasse reveals the difficulty of reconciliating innovation policies with the objectives of national security and financial stability.
Now, passing the Genius Act depends on whether the revision can adequately address democratic objections without unraveling the bipartisan support protected during the committee’s markup.
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