U.S. Dollar’s Strength Boosted: What Is the GENIUS Act?
The U.S. is on the verge of a major development in cryptocurrency regulation. The bipartisan GENIUS Act—short for Guiding and Enhancing the Nation’s Innovation in U.S. Stablecoins—is gaining momentum in the Senate. The bill could play a defining role in reinforcing the U.S. dollar‘s strength in an increasingly tokenized economy.
The legislation seeks to establish clear federal standards for stablecoin issuers, requiring that coins be backed 1:1 by U.S. dollars or low-risk, liquid assets like Treasuries. It also enforces compliance with anti-money laundering (AML) laws and puts Federal Reserve oversight in place.
A report by Foresight Ventures suggests the GENIUS Act could cement the dollar’s position as the settlement currency of choice in Web3. According to Foresight’s investment director Zac Tsui, the bill empowers fintechs to build more secure, compliant, and transparent financial services.
On May 20, the bill passed a procedural Senate vote 66–32 with broad bipartisan support. Following earlier pushback from some Democrats, the bill was updated and revived by key backers like Senator Kirsten Gillibrand and Angela Alsobrooks.
Introduced by Senator Bill Hagerty, the GENIUS Act is seen as a “pro-growth” framework that supports innovation. Co-sponsors include prominent names like Senator Cynthia Lummis and Senator Tim Scott. The act is poised to become the first federal-level framework for regulating stablecoins—digital assets that now have a global market capitalization exceeding $250 billion.
Supporters argue the bill will modernize outdated financial systems and protect consumers. Bo Hines, from the President’s Council of Advisers for Digital Assets, hailed the legislation as essential for safeguarding “the future of American finance.”
Industry leaders agree that the GENIUS Act carries global implications. Andrei Grachev, Managing Partner at DWF Labs, noted that U.S. regulatory standards often set the tone for the rest of the world. He emphasized that stablecoins are no longer an experiment, but “the new money”—faster, simpler, and more transparent.
The act also prohibits the misuse of stablecoin reserves, allowing them only for redemption or ultra-safe investments like overnight repo agreements. This is seen as a crucial guardrail against systemic risks, particularly those tied to the shadow banking sector.
If passed by both chambers and signed by President Donald Trump, the GENIUS Act will position the United States as the first country to adopt a comprehensive legal framework for payment stablecoins, strengthening the dollar’s dominance in the next era of digital finance.
