U.S. President Donald Trump has officially signed into law a legislation that establishes a regulatory framework for stablecoins, a type of cryptocurrency pegged to the U.S. dollar. The GENIUS Act, passed by a majority vote in the House of Representatives, aims to bring stability and legitimacy to the crypto industry, which has long operated in a volatile and unregulated manner since its inception in 2009.
At a signing event held at the White House, Trump commended the efforts of crypto supporters and industry pioneers, emphasizing the positive impact the law will have on the economy. Treasury Secretary Scott Bessent highlighted the law’s potential to strengthen the global reserve status of the U.S. dollar and increase demand for U.S. Treasuries, which are used to back stablecoins.
Stablecoins are digital assets designed to maintain a steady value, typically mirroring a 1:1 ratio with the U.S. dollar. The new law, officially known as the Guiding and Establishing National Innovation for U.S. Stablecoins Act, mandates that stablecoins must be backed by liquid assets such as U.S. dollars and disclose their reserves publicly on a monthly basis. This move is expected to enhance the credibility of stablecoins and encourage wider adoption for instant payment transfers.
Industry experts predict that the stablecoin market, currently valued at over $260 billion, could reach $2 trillion by 2028 under the new regulatory framework. The passage of this law follows extensive lobbying efforts by the crypto industry, which supported pro-crypto candidates in the previous year’s elections, including Trump.
While the law has garnered support from many quarters, some critics argue that it should have included provisions to prevent big tech companies from issuing their own stablecoins and strengthen anti-money laundering measures. Despite these concerns, the law is seen as a significant step towards establishing the U.S. as a leading hub for cryptocurrencies.
In related developments, major U.S. banks are exploring opportunities in the crypto space, considering pilot programs and partnerships to enter the market. The law is also expected to create a new demand for short-term U.S. government debt, as stablecoin issuers will be required to increase their holdings of such assets.
Trump, who has been actively involved in cryptocurrency initiatives, has been at the forefront of reshaping U.S. crypto policies. Earlier this year, he established a strategic bitcoin reserve through an executive order and launched his own cryptocurrency, $TRUMP, in collaboration with World Liberty Financial.
