The first federal stablecoin regulation law was approved by President Donald Trump, who hailed it as a “giant step to cement American dominance of global finance and crypto technology” and declared a significant win for the digital asset sector.
“The Genius Act establishes a clear and straightforward regulatory framework to establish and unleash the immense promise of dollar-backed stablecoins,” Trump stated during a White House event on Friday. “Since the inception of the internet, this could be the biggest financial technology revolution.”
The bill establishes regulations for US dollar-backed stablecoins, such as requiring businesses to keep dollar-for-dollar reserves in short-term government debt or other securities that are supervised by federal or state authorities. Proponents believe it will enable the wider use of digital assets in the financial industry.
Earlier Friday, senior Treasury officials briefed reporters on the bill under condition of anonymity, stating that it would assist maintain the supremacy of the US dollar, allow for innovation and acceptance of digital assets, and provide stablecoin issuers more assurance. According to them, it would impose stringent conditions on issuers that support stablecoins with cash or short-term Treasury debt.
The action will “secure the dollar’s as the world’s reserve currency,” according to Trump, who also stated that losing that status would be “like losing a world war.”
“This revolution has the potential to accelerate American economic growth and enable billions of people to save and transfer in US dollars due to the privacy, flexibility, and decentralization of cash,” he stated.
The passage is a political turning point for a fledgling sector that Trump initially viewed with suspicion but later came to support. The president promoted the law as the focal point of what he called “Crypto Week.”
Chris Pavlovski of Rumble Inc., Vlad Tenev of Robinhood Markets Inc., Cameron and Tyler Winklevoss, the billionaire twins behind the Gemini exchange, and Brian Armstrong of Coinbase Global Inc. were among the tech and cryptocurrency leaders that joined Trump.
Trump told the cryptocurrency CEOs, “This signing is a huge validation of your hard work, your pioneering spirit, and your ability to never give up.”
Advocates of the recently passed bill claim that the sector, which was previously shaken by the shocking failure of Sam Bankman-Fried’s FTX cryptocurrency exchange, will now benefit from a stable regulatory framework and credibility for the asset class.
The legislation cleared the House with wide bipartisan support following a months-long campaign that was nearly derailed by conservative legislators who opposed the package and requested a clause banning the Federal Reserve from producing digital money. The hardliners met with Trump at the White House and eventually dropped their blockade after House leadership guaranteed them that a provision addressing central bank digital assets would be included in a defense authorization bill later this year.
Democrats attempted in vain to include a clause prohibiting elected officials and their relatives from engaging in stablecoin projects. Trump and his family have connections to digital asset companies like World Liberty Financial, which has its own stablecoin and branded token. This legislation might have an effect on them. Democratic opponents of the bill cautioned that it falls short in protecting consumers and that, should digital tokens fail, it may result in calls for government bailouts.
The passage of the measure signifies the rise of cryptocurrency executives and investors as a political power, after they supported politicians who were supportive of their sector in the 2024 election by using well-funded PPACs. During the campaign, the cryptocurrency industry was very supportive of Trump.
David Sacks, a venture investor from Craft Ventures LLC, was appointed by Trump as the first White House czar for artificial intelligence and cryptocurrency.
A Strategic Bitcoin Reserve and a separate stockpile of other digital assets are to be established, according to an executive order the president signed when hosting business executives at the White House in March. His government has also promised to strengthen regulators who support cryptocurrencies and has halted or dropped legal actions and investigations that targeted companies including OpenSea, Uniswap Labs, Coinbase, and Robinhood.
“I got you guys out of so much trouble,” Trump said to the executives present at the event on Friday.
