Trump signs the first US law on stablecoins, calling it a ‘financial revolution.’
The Genius Act, establishes a clear regulatory framework for US dollar-backed stablecoins. Issuers must maintain dollar-for-dollar reserves in short-term government securities or equivalent assets, under the oversight of state or federal regulators.
US President Donald Trump has signed the first federal law aimed at regulating stablecoins, marking a significant victory for the digital asset industry. During a White House ceremony on Friday, Trump characterized the bill as a “giant step to cement American dominance of global finance and crypto technology.” “The Genius Act creates a clear and simple regulatory framework to establish and unleash the immense promise of dollar-backed stablecoins,” Trump stated. “This could be perhaps the greatest revolution in financial technology since the birth of the internet itself.”
Senior Treasury officials stated that the bill will provide essential certainty to the digital asset space, as reported by Bloomberg. It was stated that it will foster innovation while preserving the US dollar’s global dominance. The legislation is viewed as a precursor to broader adoption of digital dollars within the financial system.
Trump emphasized the significance of preserving the dollar’s global status, asserting, “Losing that position would be like losing a world war.” He stated, “With the privacy, flexibility and decentralisation of cash, this revolution has the potential to supercharge American economic growth and empower billions of people to save and transfer in US dollars.” The bill’s passage marks a change in Trump’s position on digital assets. Initially skeptical, he has now fully embraced the industry, even advocating for the legislative initiative as “Crypto Week.” The law follows the significant repercussions stemming from the collapse of FTX, spearheaded by Sam Bankman-Fried. Proponents of the new measure assert it will establish a stable and credible regulatory environment for the industry.
Passing the bill faced political hurdles. Conservative lawmakers stalled progress, insisting on a clause to prevent the Federal Reserve from introducing a central bank digital currency. Following a meeting with Trump, they consented to withdraw their opposition in exchange for a distinct provision to be added to an upcoming defense bill. Democrats sought to implement a ban that would prohibit elected officials and their families from engaging in stablecoin ventures. The effort was unsuccessful, prompting concerns about Trump’s family ties to World Liberty Financial — a company that has its own token and stablecoin.
Crypto is gaining political influence. The new law indicates the increasing power of crypto investors in Washington. The industry supported friendly candidates in the 2024 elections via influential political action committees, with Trump garnering widespread backing. Trump appointed venture capitalist David Sacks as the White House’s first AI and crypto czar. Earlier this year, he signed an executive order to establish a Strategic Bitcoin Reserve and advocated for crypto-friendly regulators while relaxing investigations into companies such as Coinbase and Robinhood.
