Trump Signs GENIUS Act, Ushering in First U.S. Stablecoin Regulations
Landmark law establishes federal framework for stablecoins, boosting crypto legitimacy but sparking debate over oversight and Trump’s personal ventures.
President Donald Trump signed the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act into law on Friday, marking the first major federal legislation regulating cryptocurrencies in the U.S. The bill, passed with bipartisan support (308-122 in the House and 68-30 in the Senate), creates a regulatory framework for stablecoins—digital currencies pegged to assets like the U.S. dollar to minimize volatility—valued at over $260 billion, with projections of growth to $2 trillion by 2028, according to Standard Chartered.
The GENIUS Act mandates that stablecoin issuers back their tokens with liquid assets, such as U.S. dollars and Treasury bills, and disclose reserve compositions monthly, enhancing transparency and consumer trust. The law aims to mainstream stablecoins for instant payments, potentially disrupting traditional banking and reducing transaction fees. “This could be the greatest revolution in financial technology since the internet,” Trump said at the White House signing, attended by crypto executives from firms like Circle and Robinhood.
The crypto industry, which spent over $245 million supporting pro-crypto candidates in 2024, hailed the act as a milestone for legitimacy. Coinbase CEO Brian Armstrong called it a “new phase for crypto in the U.S.,” while Blockchain Association CEO Summer Mersinger labeled it a “defining moment” for digital assets.
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However, critics, including Sen. Elizabeth Warren, argue the law lacks robust anti-money laundering protections and fails to address conflicts of interest, particularly Trump’s ties to World Liberty Financial, which issued the USD1 stablecoin. A provision bans Congress members from profiting off stablecoins but excludes the president and his family.
The act could drive demand for Treasury bills, with JPMorgan estimating stablecoin issuers may become their third-largest buyers, though some warn of potential market volatility. Two additional bills passed the House—a market structure framework (Clarity Act) and a ban on Federal Reserve-issued digital currencies—await Senate approval. Trump’s earlier executive order for a strategic Bitcoin reserve underscores his push to make the U.S. the “crypto capital of the world.”
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