Trump's Stablecoin Push: $150 Billion Bitcoin Boost on the Horizon

Bitcoin poised for a $150 billion influx as Trump administration pushes for sovereign fund, according to industry experts. The U.S. government is set to introduce legislation that could significantly boost the cryptocurrency market, with President Trump vowing to help grow the domestic crypto industry.

Senator Bill Hagerty, a Tennessee Republican, will introduce the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act on Tuesday. The bill aims to create a predictable regulatory environment for stablecoins, a type of cryptocurrency marketed as less volatile due to their value being pegged to the U.S. dollar or other stable assets. Proponents argue that federal regulation would lend legitimacy to the asset class, potentially leading to broader adoption.

The GENIUS Act outlines rules for issuing stablecoin payments and requires issuers to back stablecoin payments with U.S. currency, Federal Reserve notes, Treasury bills, and other assets. It also mandates that stablecoin issuers disclose audited reports each month about the reserves that back the stablecoins, with false reports triggering criminal penalties. Nonbank stablecoin issuers would be regulated and supervised by the Office of the Comptroller of the Currency, an independent bureau within the Treasury Department.

The stablecoin market has grown significantly, reaching a market value of $205 billion by the end of 2024. Tether Holdings Ltd., a cryptocurrency firm, dominates the market, with incoming Commerce Secretary Howard Lutnick's firm Cantor Fitzgerald holding a stake in Tether.

President Trump has committed to bolstering the crypto industry by easing regulatory constraints and elevating crypto-friendly regulators. His approach marks a shift from former President Joe Biden's administration, which was largely skeptical of digital assets and prioritized investigations and enforcement actions over creating regulatory guidelines.

Last month, Trump signed an executive action calling for the development and growth of lawful and legitimate dollar-backed stablecoins worldwide. He also called to block any further work on a central bank digital currency, which has been seen as a potential competitor to stablecoins. While the order created a working group to recommend a regulatory framework for digital assets, the actual policy change would have to be approved by Congress. Both Democrats and Republicans have expressed interest in addressing stablecoin regulation.