The U.S. Senate passed the Guiding and Establishing National Innovation for U.S. Stablecoins Act, or GENIUS Act, on Tuesday, which aims to establish a regulatory framework for stablecoin issuance. This move is expected to prompt corporate financial leaders to reassess the use cases of this crypto asset.

The GENIUS Act has not yet passed the House of Representatives, but the regulatory clarity it seeks to bring to the cryptocurrency space will be a key factor in driving broader adoption of stablecoins, especially among more conservative institutions such as banks and executives like chief financial officers, said Paul Brody, global blockchain leader at Ernst & Young, one of the Big Four accounting firms.

Although stablecoins and their issuers have existed for years, large existing institutions or entities "need more than the fact that other companies haven't been prosecuted," Brody said in an interview. "They need some kind of green light."

Raising the bar for entry

The bill, which passed 68-30 on Tuesday, aims to address long-standing ambiguity in the digital asset space and the use of key assets such as stablecoins, whose value is pegged to another asset, typically a fiat currency like the U.S. dollar.

"With the GENIUS Act, we are bringing clarity to an industry shrouded in uncertainty and proving that bipartisan, principled leadership can still deliver tangible results for the American people," Republican Senator Tim Scott, chairman of the Senate Banking Committee and a co-sponsor of the bill, said in a Tuesday press release supporting the bill's passage in the Senate.

For example, the bill currently states that "permitted payment stablecoins are not considered securities under securities laws." This classification aims to ease previous disputes between some industry participants and regulators such as the U.S. Securities and Exchange Commission (SEC). Under former SEC Chair Gary Gensler, the agency sued several crypto companies for allegedly illegally selling securities.

According to a bill summary, the GENIUS Act also sets out potential requirements for "permitted issuers," including holding reserves and publicly disclosing their redemption policies.

The framework the bill aims to establish could help ease concerns that might prevent risk-averse CFOs and treasurers from using stablecoins. This comes as business leaders have increased their focus on using stablecoins in scenarios such as cross-border payments amid the Trump administration's efforts to build a friendlier relationship with the digital asset space, CFO Dive previously reported.

Brody said establishing a clear regulatory framework would also help improve the "quality of competition" within the stablecoin industry.

"It will raise the quality bar for the market and make it easier for people to evaluate what is a reasonable value proposition," Brody said.

Strengthening control mechanisms

The Senate's passage of the GENIUS Act comes amid broadly growing interest in stablecoins from businesses and regulators, driven by the Trump administration's efforts to build a friendlier relationship with the cryptocurrency and digital asset space. Among other initiatives, the Trump administration has unveiled plans to establish a national digital asset reserve and formed a working group on stablecoins, CFO Dive previously reported.

Advocates and participants in the crypto industry have praised these attempts as key steps toward further integrating digital assets into the mainstream financial system.

As attention on these assets grows, industry organizations have also weighed in on the need for clear guidelines. For example, the American Institute of Certified Public Accountants (AICPA) issued an exposure draft on proposed standards for stablecoins ahead of the Senate vote, aiming to create greater trust and transparency around their use for investors, regulators, and shareholders, according to a recent press release.

"Because controls surrounding digital asset operations are integral and foundational to the reliability of the information presented by these entities, it is critical to implement, operate, and monitor these controls," the AICPA said in the press release.

As businesses examine potential uses for stablecoins, keeping a close eye on the regulatory environment is crucial. For CFOs considering how to use stablecoins for cross-border payments, their use "must be legal on both sides of the transaction," Brody said.

A broader shift toward using stablecoins for international payments will depend on these regulatory approvals, he said. As the space matures, "I think you'll see CFOs in the supply chain ecosystem start to do due diligence on their business partners: 'Who's in the network, and who holds stablecoins?'" he said.