USDT Regulation on the Horizon as GENIUS Act Clears Senate Hurdle

The U.S. Senate has taken a significant step toward stablecoin regulation with the advancement of the GENIUS Act, which recently cleared a critical procedural vote. This development signals growing bipartisan support and could bring long-awaited clarity to the stablecoin market, including major players like USDT. Below is a detailed summary of the implications and reactions to this landmark bill.

U.S. Senate Advances GENIUS Act, Paving Way for Stablecoin Regulation

The GENIUS Act, a landmark bill aimed at establishing clear regulatory frameworks for stablecoins, has overcome a critical procedural hurdle in the U.S. Senate. A 66-32 cloture vote on May 19 signals growing bipartisan support, setting the stage for a final floor vote.

Stablecoin issuers are bracing for operational changes as the bill promises long-awaited legal clarity. Critics argue the legislation fails to address broader crypto market concerns, focusing narrowly on dollar-pegged assets.

Market participants across exchanges including Coinbase, Binance, and Kraken are monitoring developments closely. The outcome could reshape liquidity dynamics for major stablecoins like USDT and USDC, with potential Ripple effects throughout crypto markets.

Binance Lists Trump-Linked USD1 Stablecoin with Regional Restrictions

Binance, the world’s largest cryptocurrency exchange by volume, has announced the listing of USD1, a stablecoin issued by World Liberty Financial (WLFI) - a DeFi venture affiliated with the Donald Trump family. Trading for the USD1/USDT pair commenced immediately upon the May 22 announcement, with deposits enabled immediately and withdrawals scheduled to open May 23.

The listing comes with significant geographic limitations. Users in the European Economic Area, Canada, parts of Ukraine, the United States, and US territories including Puerto Rico are barred from trading the new stablecoin. This selective availability underscores the complex regulatory landscape surrounding digital assets.

Despite these restrictions, the USD1 listing represents a notable expansion of Binance’s stablecoin offerings. The MOVE signals continued institutional interest in dollar-pegged digital assets, even as regulatory scrutiny intensifies globally. Market observers will be watching closely to see if other exchanges follow Binance’s lead in adopting politically-connected stablecoins.

Major U.S. Banks Explore Joint Stablecoin Venture to Compete with Crypto Giants

Wall Street giants including JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo are in discussions to launch a collaborative stablecoin project. The initiative, facilitated through their jointly owned payment infrastructure companies, aims to challenge crypto-native issuers like Circle and Tether in the $245 billion stablecoin market.

The banks’ move is contingent on forthcoming federal legislation, particularly the GENIUS Act, which WOULD establish regulatory guardrails for stablecoin issuance. This strategic pivot reflects traditional finance’s growing recognition of blockchain-based payment solutions as critical infrastructure for the digital economy.

By leveraging their existing payment networks like Early Warning Services and the Clearing House, the banking consortium could rapidly achieve scale. The development signals intensifying competition between legacy financial institutions and decentralized finance players for dominance in the future of money.