Bitcoin News Today: U.S. Enacts First Federal Stablecoin Framework, Bitcoin Surpasses $118,000

President Donald Trump signed the GENIUS Act into law on July 18, 2025, marking a pivotal shift in U.S. crypto regulation by establishing the first federal framework for stablecoin issuance. The legislation, titled Guiding and Establishing National Innovation for U.S. Stablecoins Act, aims to balance innovation with investor protection by imposing stringent reserve requirements, audit protocols, and licensing criteria for stablecoin issuers. This move follows years of regulatory ambiguity that contributed to market instability, such as the collapses of Terra and Tether. The Act mandates that stablecoin issuers maintain 1:1 reserves in cash or short-term Treasuries, undergo monthly public audits, and operate under the oversight of federal banking authorities like the OCC, FDIC, or Federal Reserve. Foreign issuers seeking U.S. market access must comply with equivalent standards, including U.S.-based reserves and regulatory registration.

The GENIUS Act introduces robust consumer safeguards, including priority redemption rights for stablecoin holders in case of issuer insolvency and prohibitions on misleading marketing claims such as government backing or legal tender status. Additionally, issuers are barred from offering interest on stablecoin balances to prevent hidden yield risks. Compliance with AML and sanctions frameworks under the Bank Secrecacy Act is now mandatory, classifying stablecoin issuers as financial institutions. Analysts note that these measures address systemic risks while fostering trust, particularly as the stablecoin market surpasses $250 billion in capitalization.

Market reactions have been swift, with Bitcoin surpassing $118,000 and Ether exceeding $3,500 following the Act’s enactment. Institutional players, including Bank of America and JPMorgan, are reportedly evaluating stablecoin offerings under the new framework, signaling a potential influx of traditional finance into the crypto sector. However, experts caution about potential ripple effects in Treasury markets and emphasize the need for further regulatory clarification on issues like accounting standards.

The Act’s implementation phase, however, remains critical. Regulators have 180 days to finalize rules, with full legal effect commencing either 120 days after rule publication or on January 18, 2027, whichever is sooner. Digital platforms, including exchanges and custodians, face a three-year transition period to comply with the new standards. This phased approach aims to mitigate disruption while allowing market participants to adapt. The U.S. action is also likely to influence global regulatory discussions, potentially reshaping norms within the G20 and beyond.

The GENIUS Act sets a precedent for international cooperation on digital asset governance and paves the way for complementary legislation, such as the proposed CLARITY Act and Anti-CBDC Act, which could expand regulatory scope to token classification and central-bank digital currencies. By aligning stablecoin oversight with traditional financial safeguards, the Act not only legitimizes the asset class but also positions the U.S. as a leader in structuring the future of digital finance. While challenges remain in execution, the law represents a foundational step toward a regulated, institutional-grade crypto ecosystem.

Source: [1] [How the GENIUS Act Will Reshape Crypto Regulation in the U.S.] [https://coinmarketcap.com/community/articles/688600d031d9044a234223a9/]