Trump Signs GENIUS Act, Mandating 1:1 Reserve for Stablecoins

In a significant development for the U.S. crypto industry, President Donald Trump signed the GENIUS Act into law, marking a pivotal moment in the regulatory landscape for digital assets, particularly dollar-backed stablecoins. This move underscores the Trump administration's efforts to bring clarity and control to the sector, following a dramatic rescue from legislative limbo just days earlier.

The GENIUS Act, which stands for Guiding and Establishing National Innovation for U.S. Stablecoins, had initially faced a setback when it was blocked in a House vote on Tuesday. However, a rare Oval Office intervention by President Trump rallied House Republicans, who then passed a revised procedural motion on Wednesday. This motion, supported by 215 Republicans and opposed by 211 Democrats, paved the way for the final House votes on the GENIUS Act, the Anti-CBDC Surveillance State Act, and the CLARITY Act.

The GENIUS Act mandates 1:1 reserve backing for stablecoins, introduces federal licensing pathways for issuers, and places oversight responsibilities with prudential regulators. This legislation had already passed the Senate in June with a bipartisan vote of 68-30, highlighting its broad support among lawmakers.

Simultaneously, the Securities and Exchange Commission (SEC) is considering targeted regulatory relief for tokenized securities. SEC Chairman Paul Atkins announced that the agency is evaluating "innovation exemptions" to ease the regulatory burden on tokenization platforms and digital asset infrastructure providers. This move suggests a softer, more pragmatic approach from the SEC, aiming to support novel trading models and infrastructure for tokenized securities. Atkins acknowledged that technology is outpacing regulation and that the SEC is exploring guardrails to allow responsible experimentation, particularly in tokenized equity and real-world asset platforms.

However, not all lawmakers are in favor of these regulatory changes. Congresswoman Maxine Waters (D-CA), a long-time critic of the crypto industry, has launched a fierce counteroffensive against the GOP’s crypto legislation package. In a pair of press releases, Waters slammed the GENIUS and CLARITY Acts as reckless and dangerous, accusing the legislation of exposing consumers to exploitation by bad actors in the crypto industry and undermining national security. She also criticized President Trump, alleging that he is using public policy to further his crypto-related business interests.

With the GENIUS Act now law, the focus shifts to its implementation. The Act provides for an 18-month rulemaking and compliance window, during which federal agencies will coordinate with states to finalize supervisory frameworks for stablecoin issuers. The SEC’s potential regulatory tweaks are still in the consultation phase, but if implemented, they could offer much-needed breathing room for tokenized platforms attempting to scale legally in the U.S. Meanwhile, Democrats are expected to continue challenging the new regulatory framework, possibly through judicial reviews or state-level resistance.