WASHINGTON: US President Donald Trump on Friday (Jul 18) signed into law the country’s first major regulation on stablecoins, marking a milestone for the cryptocurrency sector as it pushes to gain broader legitimacy and adoption.
The new law, officially titled the GENIUS Act, establishes federal rules for stablecoins – cryptocurrencies designed to maintain a fixed value, typically pegged to the US dollar. The Bill passed the House by a vote of 308 to 122, with support from most Republicans and nearly half of Democrats.
“This signing is a massive validation of your hard work and pioneering spirit,” Trump said during the signing ceremony, which included several crypto executives.
Under the law, stablecoins must be fully backed by liquid assets, including US dollars and short-term Treasury bills. Issuers will be required to publicly disclose the composition of their reserves each month.
The law is seen as a significant victory for crypto advocates, who have lobbied for a clear regulatory framework for years. The move aims to provide certainty for the sector, encourage innovation and draw in mainstream institutions and users.
MARKET IMPACT AND CRITICISM
The stablecoin market, currently valued at more than US$260 billion according to CoinGecko, could expand to US$2 trillion by 2028, Standard Chartered estimated earlier this year.
Industry players argue the law will increase stablecoins’ credibility and facilitate their use by banks, merchants and consumers for instant payments. Some crypto firms, including Circle and Ripple, are already pursuing banking licenses to enable faster, lower-cost settlement and increase trust.
However, critics say the legislation falls short on several fronts. Democrats and consumer advocates argue it lacks strong anti-money laundering protections and fails to restrict tech giants or foreign entities from issuing their own stablecoins, raising concerns over market concentration and regulatory oversight.
The law’s passage follows an aggressive lobbying push by the crypto sector, which spent more than US$245 million in the 2024 election cycle backing pro-crypto candidates, including Trump, according to Federal Election Commission data.
