Trump's "encryption gold mine" ignites controversy: Can the GENIUS Act reshape the global stablecoin landscape?

Despite the breakthrough in the Senate, the bill still needs to pass through the House of Representatives and receive the President's signature. The Trump family's encryption interests and the China-U.S. digital finance game add uncertainty to its prospects.

Written by: Luke, Mars Finance

On the morning of May 20, 2025, Beijing time, the U.S. Senate overwhelmingly passed a motion to terminate the debate (cloture) of the GENIUS Act stablecoin bill by an overwhelming majority of 66 votes to 32. This milestone ended the "filibuster" that could delay legislation and paved the way for the first federal-level regulatory framework for stablecoins in the United States. From Senator Bill Hagerty's Feb. 4 first draft to today's bipartisan revision, the GENIUS Act is not just a piece of technical legislation, it's a crossroads of political gamesmanship, commercial interests, and global financial strategy. However, the bill still needs to pass the House of Representatives and the president's signature, and the Trump family's "crypto gold mine", the restrictions of tech giants, and the dark war between China and the United States in digital finance make its prospects full of suspense. If this bill is implemented, how will it reshape the stablecoin market? And when will it become law? Let's dive in.

Legislative Marathon: The Rocky Road from the Senate to the White House

The legislative process of the GENIUS Act is like a high-risk marathon, and the Senate breakthrough is just a stop along the way. The passing of the motion to terminate debate means that the bill has overcome procedural obstacles and entered the stage of full debate and amendments. The current distribution of seats in the Senate is 53 Republican, 45 Democratic, and 2 Independents (leaning Democratic), with overwhelming support of 66 votes showing rare bipartisan cooperation. However, the final implementation of the bill still needs to cross the following key nodes:

1. Full Senate Debate and Vote: Next, senators will engage in intense debates over the details of the bill and may propose amendments. Amendments need to pass by a simple majority (51 votes), but significant changes require bipartisan negotiation. After the debate concludes, the Senate will vote on the final version, and if it passes by a simple majority, the bill will be sent to the House of Representatives. This phase is expected to take 2-4 weeks and may be completed by mid-June.
2. House Review and Voting: The House is narrowly controlled by the Republicans with a 220 to 215 advantage, and the bill requires only a simple majority (218 votes) to pass, making the process smoother than in the Senate. However, partisan divisions and lobbying by interest groups may lead to amendments, taking about 1-2 months. If the version differs from that of the Senate, both chambers will need to reach an agreement through a conference committee, which is expected to be completed before August.
3. Presidential Signature or Veto: After the bill passes both houses, it is sent to President Trump for consideration. Trump can sign it into law or exercise his veto power. If vetoed, Congress must override it with a two-thirds majority in both houses, which is extremely difficult (historical data shows that as of 2023, only 7 out of 111 vetoes have been overridden). More tricky is that if the president sets the bill aside during a congressional recess, it triggers a "pocket veto," causing the bill to automatically fail. Presidential review typically takes 10 days, with the earliest completion expected by the end of August.

Based on the current progress and the congressional schedule (August is a recess period), the GENIUS Act may become law as early as September 2025 if it proceeds smoothly. If significant disputes or vetoes arise, the process may be delayed until the end of the year or even early 2026. Trump previously promised that the stablecoin regulatory framework would be introduced before August, setting an urgent timeline for the bill, but the controversies surrounding his personal interests could become a variable.

Core Provisions of the Bill: A Clear Regulatory Blueprint

The GENIUS Act aims to establish a unified and transparent federal regulatory framework for the stablecoin market, with its core provisions clearly outlining the regulatory blueprint through a point-by-point design. The following are the key contents of the bill, based on the latest draft from May 15 (referencing the disclosure by encryption journalist Eleanor Terrett):

• Definition of Stablecoin: A stablecoin is defined as a digital asset used for payment or settlement, anchored to the US dollar or other fixed currency values, backed 1:1 by high-quality liquid assets such as cash, short-term US Treasury securities, or central bank deposits.
• Dual regulatory framework:
• Issuers with a market cap exceeding 10 billion USD are subject to federal regulation and supervised by the "Stablecoin Certification Review Committee."
• Issuers with a market value below 10 billion USD may choose state-level regulation, but state standards must be consistent with federal requirements.
• Reserve requirement: The issuer must maintain a 1:1 reserve ratio, with reserve assets isolated from operational funds, and undergo independent audits monthly.
• Transparency and Disclosure: Issuers must regularly disclose the composition of reserve assets, redemption policies, and audit reports to ensure that holders have the right to be informed.
• Anti-Money Laundering (AML) compliance: Stablecoin issuers are classified as financial institutions under the Bank Secrecy Act and are required to fulfill customer identity verification (KYC), due diligence, and suspicious activity reporting obligations.
• Consumer Protection: In the event of the issuer's bankruptcy, the redemption rights of stablecoin holders take precedence over other creditors.
• Restrictions on Tech Giants: Non-financial tech companies (such as Meta, Google) issuing stablecoins must meet strict financial risk control and data privacy protection requirements, reinforcing the separation between banking and commerce.
• Prohibition of misleading advertising: Issuers must not falsely claim to have FDIC insurance or use terminology related to the U.S. government.
• Foreign Issuer Regulation: Foreign stablecoin issuers operating in the United States must comply with federal standards and are subject to review committee evaluation.

These terms aim to balance innovation and security, but have also sparked intense controversy. The newly established "Stablecoin Certification Review Committee" replaces some functions of the Treasury Department, intending to decentralize regulatory power, but its actual effectiveness remains to be seen. The restrictions on tech giants are viewed as a double-edged sword, preventing market monopolies, but may also weaken the United States' competitiveness in digital financial innovation.

The Controversial Powder Keg: The Trump Family and the Tech Giants' Game

The promotion of the GENIUS Act has been like a political storm, and the Trump family's business interests and restrictions on tech giants have become the focus of controversy. Democratic Senator Elizabeth Warren has publicly slammed Trump for profiting hundreds of millions of dollars from the crypto market through his associated World Liberty Financial and USD1 stablecoin projects, and may continue to suck hundreds of millions of dollars every year. Disturbingly, the latest version of the bill does not explicitly prohibit the president and his relatives from participating in crypto projects, a "loophole" that has been criticized as potentially condoning the transfer of benefits. Warren warned that if the GENIUS Act expands the stablecoin market, it could further amplify Trump's "crypto gold mine".

The two parties reached a compromise on May 15, removing provisions against Trump's projects. Democratic Senator Kirsten Gillibrand emphasized that the revised bill focuses on consumer protection rather than personal ethics. However, this compromise did not quell the controversy, and the House's review or public opinion may reignite the topic. The Trump family's encryption interests not only raise ethical concerns but could also influence the president's attitude toward the bill—whether to sign or veto it could become a test of balancing personal interests and political image.

The restrictions on tech giants have also sparked heated discussions. The bill clearly states that non-financial tech companies must meet stringent conditions to issue stablecoins, directly targeting giants like Meta and Google. Meta's Libra (later renamed Diem) project was aborted due to regulatory pressure, and now the GENIUS Act further raises the barriers. Supporters believe this will prevent tech companies from monopolizing the market by exploiting user data and network effects; opponents warn that excessive restrictions may push innovation to regions with looser regulations, such as Singapore or Dubai.

The shortcomings of anti-money laundering and national security provisions have also become a focal point of debate. Nine Democratic senators pointed out in a joint statement that the bill lacks sufficient regulatory strength over foreign issuers, which may leave room for illicit financial activities. Whether the newly established review committee can effectively coordinate federal and state-level regulations remains to be seen.

The Significance of Approval: Reshaping the Stablecoin Market and the Dollar's Hegemony

If the GENIUS Act becomes law, it will have a profound impact on the stablecoin market and the global financial landscape, and its significance can be understood from the following dimensions:

• Market standardization and industry consolidation: Strict reserve requirements and anti-money laundering obligations will eliminate non-compliant small issuers, driving the industry towards concentration at the top. Data shows that by 2025, the global stablecoin market size will exceed 200 billion USD, with an average daily trading volume reaching 60 billion USD. Standardization will enhance consumer trust and attract institutional funds, with the market size expected to reach 300 billion USD by 2026. However, compliance costs may force small and medium-sized issuers to exit, leading to increased market concentration.
• Consumer and investor protection: Priority redemption rights and transparent disclosure requirements will reduce holder risks and enhance market stability. Referencing the 2022 TerraUSD collapse (with losses exceeding $40 billion), the protective measures of the GENIUS Act will effectively prevent similar crises and attract retail and institutional investors.
• The digital extension of dollar hegemony: Stablecoins, as the digital carriers of the dollar, represent a new frontier of American financial dominance. Dollar stablecoins account for over 90% of the global share, and the unified regulation under the GENIUS Act will solidify this advantage, promoting the application of stablecoins in areas such as cross-border payments and supply chain finance. Conversely, if regulation is lacking, the fragmentation of state-level regulations may weaken the influence of the dollar.
• Strategic Layout of Global Competition: The EU's MiCA regulation will be implemented in 2024, while Hong Kong and Singapore are also accelerating digital asset regulation. If the United States fails to establish a federal framework in a timely manner, innovation opportunities may shift overseas. Treasury Secretary Scott Bessent warned that the obstruction of the GENIUS Act would be a "generational mistake." On the contrary, the passage of the bill would attract global issuers to register in the United States, strengthening its position as a digital financial hub.

However, the strict provisions of the bill also raise concerns. Restrictions on tech giants may slow down the pace of innovation, and Meta or Google may shift resources overseas. The high barriers for foreign issuers could trigger international friction, especially against the backdrop of escalating digital financial competition between China and the United States. The digital currency of China's central bank (e-CNY) has been piloted in over 20 countries, and if the GENIUS Act is too harsh, it could create opportunities for the internationalization of the renminbi.

Time Prediction and Key Variables

The passage time of the GENIUS Act depends on legislative efficiency and political maneuvering. Based on the current progress and congressional schedule, the expected timeline is as follows:

• Mid-June 2025: The Senate completes debate and voting, with the bill expected to pass soon.
• Early August 2025: The House of Representatives completes the review and coordination, unifying the versions from both chambers.
• Early September 2025: The bill is sent to the president for signature, potentially becoming law at the earliest.

Late 2025 to early 2026: If significant controversies arise (such as a Trump veto or modifications by the House of Representatives), the process may be delayed.

Key variables include:

• Trump's attitude: His family's encryption interests may influence the signing decision. If vetoed, it would be extremely difficult for Congress to overturn.
• House Divided: There are differing opinions within the Republican Party regarding the tech giant provisions, which may lead to delays in amendments.
• Public opinion: If the controversies surrounding the Trump family are amplified by the media, it may force lawmakers to reassess the terms.

Conclusion: The Crossroads of Digital Finance

The Senate breakthrough of the GENIUS Act is a turning point in the regulation of digital finance in the United States, but its ultimate success or failure remains uncertain. From the Trump family's "encryption gold mine" to the forbidden zones of tech giants, from the extension of dollar hegemony to the undercurrents of the China-U.S. game, this bill is not only technical legislation but also a reshaping of the global financial order. In the game between innovation and regulation, every step of the GENIUS Act affects the nerves of the market. In the coming months, the struggle in the House of Representatives, the president's choices, and the responses to global competition will determine the next chapter of the stablecoin market. Regardless of the outcome, this legislative storm is destined to be recorded in history.