Trump Signs GENIUS Act Regulating Stablecoins in US

President Donald Trump has signed the GENIUS Act into law, marking a significant milestone in the regulation of stablecoins in the United States. The GENIUS Act, which stands for "Guiding and Establishing National Innovation for U.S. Stablecoins," establishes a comprehensive regulatory framework for stablecoins, a type of cryptocurrency designed to maintain a stable value by being pegged to assets such as the U.S. dollar. This legislation creates rules for entities issuing stablecoins, including requirements for maintaining reserves, handling bankruptcy, and preventing money laundering.

The signing ceremony at the White House was attended by key figures in the crypto industry, including the CEOs of Coinbase and Tether. Trump highlighted the bipartisan support the bill received in Congress, noting that it creates necessary safeguards for the industry while keeping the U.S. competitive in the global crypto landscape. He contrasted his administration's support for the crypto industry with what he described as the Biden administration's attempts to "crush" it. Trump also emphasized his early backing of crypto, stating that it would strengthen the U.S. dollar and acknowledging the political support he received from the crypto community.

However, the bill faced opposition from some members of Congress. Senator Josh Hawley criticized it as a "huge giveaway to Big Tech," expressing concerns that it could incentivize companies issuing stablecoins to collect more financial data on consumers. Senator Elizabeth Warren, the Ranking Member of the Senate Banking Committee, argued that the bill contains loopholes and weak safeguards for consumers, national security, and financial stability. Warren and other Democrats also raised concerns about potential corruption, given Trump's family involvement in World Liberty Financial, a crypto firm that launched its own stablecoin, USD1. The White House has maintained that this venture does not create conflicts for the president, as his assets are managed by a trust controlled by his children.

The GENIUS Act focuses solely on stablecoins, but industry leaders and policymakers see it as a foundation for broader crypto legislation. While the specifics will take time to implement, the move signals a shift from enforcement-first policy to structured regulation—potentially setting a precedent for other countries to follow. The bipartisan legislation, passed with wide support in both chambers of Congress, establishes a framework for identifying and overseeing dollar-pegged digital asset issuers. With the law now in place, attention shifts to regulators, who must define issuer qualifications and build out enforcement rules. Though firms like Tether and Circle currently dominate the market, interest from traditional financial institutions is expected to accelerate as regulatory clarity improves.

The GENIUS Act aims to address the lack of regulatory clarity that has hindered the mainstream adoption of cryptocurrency in the U.S. By setting initial guardrails and consumer protections, the legislation seeks to foster a more stable and secure environment for stablecoins. Industry advocates believe that this regulatory framework will help make cryptocurrency more mainstream, attracting more investors and users to the market. The act's passage and signing into law represent a significant step forward for the crypto industry, providing a clear path for the future of stablecoins in the United States.