GENIUS Act Heads to Trump’s Desk After House Passage

July 18, 2025 — The U.S. House of Representatives has officially passed the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, a major step toward stablecoin regulation.

The bill received overwhelming bipartisan support, clearing the chamber with a 308–122 vote. With the Senate already approving it in June, the final decision now rests with President Donald Trump, who is expected to sign it before the August recess.

Reserve and Backing Requirements Strengthen Trust

Under the GENIUS Act, stablecoins must be fully backed by U.S. dollars or Treasury-equivalent assets at all times. This measure is designed to avoid algorithmic instability and restore user confidence. It sets a clear benchmark for how assets must be held and audited, a cornerstone of the new stablecoin regulation.

Mandatory Monthly Audits for Transparency

The bill requires all regulated stablecoin issuers to publish third-party audits every month. These must verify not just reserve levels but the quality of backing assets. This emphasis on regular reporting aims to prevent the kind of opacity that led to the downfall of previous stablecoin projects.

Yield Bans Shake Up the Business Model

Offering interest or yield on regulated stablecoins will be strictly prohibited under this new stablecoin regulation. Centralized firms and DeFi platforms will have to rethink their product lines. Popular models involving lending, staking, or rebasing rewards will no longer be allowed for compliant stablecoins.

A Dual Licensing Framework for Issuers

The legislation creates a new federal license specific to stablecoin issuers. Alternatively, issuers can apply for a national trust bank charter, which allows them to bypass individual state licensing. This dual-path system provides flexibility but increases the pressure on firms to meet bank-grade standards.

Cross-Border Stablecoins Face Strict Barriers

Foreign stablecoins will need to comply with U.S. rules if they’re offered to American users. Issuers based in friendly jurisdictions may apply for exemptions, but they must still meet audit and reserve mandates. This could limit the presence of tokens like $EURT or $SGD-backed coins in the U.S. market unless they adapt to stablecoin regulation.

No Clarity Yet for DeFi Integration

The bill avoids specifying how truly decentralized projects will be regulated, creating uncertainty in the DeFi space. Platforms using algorithmic stablecoins or offering wrapped assets may be forced to operate outside U.S. compliance unless further guidance is issued. This omission could become a point of legal friction.

Regulatory Oversight Will Be Fragmented

Stablecoin regulation will fall under the jurisdiction of multiple agencies — including the OCC, Treasury, and Federal Reserve — depending on the issuer’s licensing path. Smaller issuers under $10B may be able to remain under state oversight, but only if their state offers a compliant framework.

What Has Happened So Far

• May 21, 2025 – The GENIUS Act (S. 394, aka S. 1582) was introduced in the U.S. Senate by Sen. Bill Hagerty (R‑TN).
• June 17, 2025 – The Senate passed the bill by a 68–30 bipartisan vote.
• July 17, 2025 – The U.S. House of Representatives passed the Senate version of the bill with a 308–122 vote.
• July 17, 2025 (same day) – The bill officially “cleared the House” and was sent to President Trump’s desk awaiting his signature.
• Now (July 18–more likely July 17) – The bill is awaiting President Trump’s signature. He has indicated strong support and is expected to sign before the August recess.