Trump Enacts GENIUS Act to Regulate Stablecoins in the US

By: Isha Das

In a significant move for the cryptocurrency industry, President Donald Trump has signed the Guiding and Establishing National Innovation for US Stablecoins Act, also known as the GENIUS Act, into law. This historic legislation provides a federal regulatory framework for stablecoins, marking the first time such comprehensive rules have been established in the United States. The signing took place shortly after the legislation was approved by Congress, highlighting a bipartisan commitment to adapt the financial regulatory environment to the evolving digital currency landscape.

The GENIUS Act assigns the Federal Reserve with the task of licensing and supervising national-level, insured depository institutions. It allows state-chartered firms that meet certain standards concerning reserves, disclosures, redemptions, and risk controls to mint dollar-pegged tokens. Issuers are required to back each token with high-quality liquid assets like cash or Treasury bills and must provide regular attestation reports, which ensures consumer protection and asset integrity. The act guarantees consumers the right to redeem tokens at face value and necessitates the segregation of reserve assets unless the customer allows for their use.

Senate Banking Committee ranking member Tim Scott celebrated the act, calling it a milestone that provides much-needed regulatory clarity for the stablecoin industry. The promise of faster and cheaper payment solutions is expected to fortify the US dollar's global dominance. Meanwhile, Treasury Secretary Scott Bessent expressed gratitude to House Republicans for their efforts in pushing forward legislation that positions the United States as a leader in the crypto space.

Industry analysts have noted that this legislation might be a catalyst for the integration of cryptocurrency within the US economy. However, some concerns have been raised about potential market corrections, with recent large transfers by Bitcoin whales being scrutinized for their timing with the act's implementation. As President Trump expresses his commitment to further expand regulatory structures around crypto markets, the GENIUS Act represents a foundational step towards a more robust and structured digital asset economy, poised to innovate while maintaining stability and security.