Why the Genius Act could be a big boost for cryptocurrencies Mary CunninghamJuly 18, 2025 at 1:39 AM Funtap / Getty Images Socalled stablecoins are a step closer to becoming a mainstream form of payment in the U.S.
- - - Why the Genius Act could be a big boost for cryptocurrencies
Mary CunninghamJuly 18, 2025 at 1:39 AM
Funtap / Getty Images
So-called stablecoins are a step closer to becoming a mainstream form of payment in the U.S. as the House of Representatives on Thursday passed the bill regulating the digital currency .
The Genius Act passed in the House by a 308-122 vote after it was passed in the Senate last month with broad bipartisan support. The landmark legislation lays out the rules of the road for the $250 billion market for stablecoin, a type of cryptocurrency. The bill is also part of a broader push by Republican lawmakers and President Trump to support the cryptocurrency industry and ease regulations around the emerging sector.
"For the first time in history, Congress has passed bipartisan digital assets legislation through both the Senate and the House. The Genius Act marks a major milestone in securing America's leadership in payments innovation while protecting consumers and strengthening our national security," South Carolina Sen. Tim Scott, a co-sponsor of the bill, said in a statement Thursday following the bill's passage by Congress.
House Republicans announced last week that July 14 would be the start of "Crypto Week," when they planned to move forward on three crypto-themed bills. House lawmakers approved all three bills on Thursday which are now headed to President Trump's desk.
Along with the Genius Act, the legislation includes the Clarity Act, which would regulate digital commodities beyond stablecoins; and the Anti-CBDC Surveillance State Act, which would prevent the Federal Reserve from issuing any retail central bank digital currency directly to Americans.
The Genius Act, which is sponsored by Republican Sen. Bill Hagerty, has two Democratic co-sponsors — Sen. Kirsten Gillibrand of New York and Sen. Angela Alsobrooks of Maryland — and two Republican co-sponsors — South Carolina's Sen. Tim Scott and Wyoming's Sen. Cynthia Lummis.
Here's what to know about stablecoin and how the Genius Act could affect its use.
What is stablecoin?
Cryptocurrencies, such as bitcoin and ethereum, are prone to extreme swings in value, posing risks to investors. Stablecoins aim to reduce those risks by pegging their value to a less volatile financial asset, most commonly the U.S. dollar.
In a recent interview with CBS News' Caitlin Huey-Burns, Dante Disparte, chief strategy officer at financial technology company Circle, described stablecoins as "digital dollars." As the name implies, stablecoins are intended to be less volatile and risky than other digital tokens, making them a better medium of exchange for bank payments and other financial services, he said.
Circle is a large issuer of stablecoin and backed the passage of the Genius Act.
"At the end of the day, it's about being able to send dollars outside of banking hours and to send dollars the way you and I might interact with WhatsApp or messaging platforms," Disparte said.
Disparte estimates that around 90% of stablecoins are linked to the dollar. Stablecoins are stored and exchanged on the blockchain, the public ledger technology underlying other cryptos.
What will the Genius Act do?
Backed by crypto advocates, the Genius Act (which stands for Guiding and Establishing National Innovation for U.S. Stablecoins) established guardrails and consumer protections for stablecoins.
The bill also creates a legal category for stablecoins and establishes clear boundaries for which digital currencies could be referred to as stablecoins.
With the Genius Act passed, banks, nonbanks and credit unions could dive into the market by issuing their own stablecoins.
Along with being less volatile than other virtual currencies, stablecoins can facilitate faster, lower-cost financial transactions, supporters of the technology say. Before the Senate vote on the Genius Act in June, Sen. Bill Hagerty of Tennessee, the bill's sponsor, said stablecoins could allow businesses and consumers to settle payments "nearly instantaneously," rather than taking weeks.
Although considered less volatile than other cryptocurrencies, stablecoins come with risks. One of the biggest is that the digital currency can get "depegged" from its underlying asset if that asset's value or liquidity changes. This can trigger trading loses, or systemic market risks to insolvency and liquidity, according to S&P Global Ratings.
In 2023, for example, the failure of U.S. banks Silicon Valley Bank, Signature Bank and Silvergate Bank, caused two types of stablecoins — the USDC and DAI — to depeg.
Stablecoins are also subject "to market volatility, market confidence and adoption, technology risk, demand and supply and market liquidity," according to S&P Global.
Are stablecoins catching on in financial services?
As the Genius Act awaited approval from Congress, some of the nation's largest banks were already considering how they could integrate stablecoins into their business as they face mounting competition from fintech players like Circle.
Citigroup CEO Jane Fraser said on the company's earnings call Tuesday that the bank is considering issuing its own form of the cryptocurrency. Citigroup, the third-largest U.S. bank by assets, is already developing its digital currency capabilities in an attempt to expand revenue and attract clients, she added.
"We are closely monitoring developments in the legislative and regulatory space on coin issuance and evaluating how to best to support our clients' needs through our existing 24/7 products like [Citi Token Services], in addition to exploring options around issuing our own external token or coin and working with existing providers," Biswarup Chatterjee, global head of partnerships & innovation for Citi's Services business, told CBS MoneyWatch in a statement.
JPMorgan Chase, the largest U.S. bank, also plans to use stablecoin, CEO Jamie Dimon told analysts in an earnings call on Tuesday.
Outside of the banking world, companies like Walmart and Amazon are also exploring the idea of issuing their own stablecoins, Sam Mcingvale, head of product at blockchain technology company Optimism, told CBS MoneyWatch in an email on Tuesday.
"If new stablecoin legislation is passed, we expect it to open the floodgates even further," he said.
What is Trump's position?
Congress' approval of the Genius Act aligns with Mr. Trump's commitment in March to make the U.S. the "crypto capital of the world."
At a bitcoin conference in Nashville, Tennessee, last year, Mr. Trump also said it would be his administration's policy to "keep 100% of all the bitcoin the U.S. government currently holds or acquires into the future."
Mr. Trump has taken other actions that point to his interest in cryptocurrency. In January, shortly before taking office, he and his wife Melania Trump launched their own meme coins, a highly volatile type of crypto whose value derives from their online popularity.
The president on Tuesdy posted his support for the Genius Act on Truth Social.
"The Genius Act is going to put our Great Nation lightyears ahead of China, Europe and all others, who are trying endlessly to catch up, but they just can't do it," Mr. Trump wrote.
The price of bitcoin was up 1.40% on Thursday, rising to $120,584.80; etherium's price rose 3.41% to $3,486.86.
Shares of Coinbase, the world's second-largest cryptocurrency exchange, rose 3.2% on Thursday, to close at $410.75.
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