Last week,as much of the world focused on Iran and Israel, the crypto lobby celebrated a meaningful victory in Washington. “history is being made,” Jeremy allaire, the founder and CEO of circle, a stablecoin platform, wrote on X, shortly after the Senate voted through the Genius Act, a bill designed to facilitate the growth of digital currency and give crypto assets legitimacy.

Stablecoins, designed to maintain a constant value of one dollar, are less volatile than cryptocurrencies like Bitcoin and Ethereum. They currently exist in a regulatory gray area. The Genius Act (Guiding and Establishing National innovation for U.S. Stablecoins Act) aims to change this by treating stablecoins as a means of payment and establishing rules for issuers under state and federal oversight.

The bill passed with bipartisan support. Allaire believes it “will drive US economic and national competitiveness for decades to come.” However, public-interest groups and dissenting Senate Democrats view the bill’s progress as a demonstration of the crypto lobby’s influence. Mark Hays of Americans for Financial Reform stated, “The Genius Act is an important step, but it is just one of many actions that the crypto industry and its allies in the White House and Capitol Hill are taking to launch an uncontrolled experiment in unleashing crypto on the economy and the financial system.”

During the Biden Administration, several crypto exchanges failed, and Sam Bankman-Fried was convicted of fraud.SEC Chair Gary Gensler labeled the crypto industry as “rife with fraud and manipulation,” leading to lawsuits against prominent firms like Coinbase. A Pew Research Center survey revealed that over sixty percent of Americans have little faith in crypto as an investment.

In 2024, crypto-financed super PACs spent an estimated $265 million to support pro-crypto candidates and oppose skeptics. Bartlett Naylor of Public Citizen noted that the crypto lobby “recouped some of its huge investment” with the Senate vote. “The crypto sector’s financial contributions converted some elected politicians to a pro-crypto stance, and it scared the bejeezus out of a lot of others,” he added.

Proponents of the Genius Act argue it will protect stablecoin holders by requiring issuers to keep reserves in safe assets, publish reserve compositions monthly, and, for larger issuers, publish annual audited financial statements. The bill also includes money-laundering law compliance and gives stablecoin holders first claim on assets in case of bankruptcy. Christian Catalini of M.I.T.’s Sloan School of Management stated, “The Genius bill will ensure stablecoin reserves will be safe and boring, and that consumers will have a direct legal claim on the underlying assets.”

Critics argue the bill’s protections are insufficient.Hays believes it’s “a collection of half measures that will create a regulatory imprimatur for stablecoins without removing the dangers associated with them.” He compared it to the Commodity Futures Modernization Act of 2000, which weakened derivatives oversight and contributed to the 2007-09 financial crisis. “We’ve seen this show before,” Hays added.

The Senate bill includes a conflict-of-interest provision for members of Congress and senior executive branch officials, but legal experts say it wouldn’t apply to the President or Vice-President. World liberty Financial, a crypto startup majority-owned by the Trump family, is issuing a new stablecoin, USD1. Hays suggests that if the bill passes, “it is certainly possible that Trump’s stablecoin could become one of the dominant parts of the crypto ecosystem, which would be extremely rewarding to him.”

The Trump family’s involvement with the “$Trump” meme coin has drawn scrutiny. Critics argue that a Trump-owned stablecoin could facilitate funneling money to him and his companies.A co-founder of World Liberty Financial stated that USD1 would be used in a $2 billion investment in Binance by an entity tied to the UAE government. Binance’s founder, Changpeng Zhao, was sentenced for money-laundering violations and is reportedly seeking a Presidential pardon. The SEC recently dismissed a civil suit against Binance.