WASHINGTON: US President Donald Trump on Friday (Jul 18) signed into legislation the nation’s first main regulation on stablecoins, marking a milestone for the cryptocurrency sector because it pushes to realize broader legitimacy and adoption.
The brand new legislation, formally titled the GENIUS Act, establishes federal guidelines for stablecoins – cryptocurrencies designed to keep up a hard and fast worth, sometimes pegged to the US greenback. The Invoice handed the Home by a vote of 308 to 122, with assist from most Republicans and almost half of Democrats.
“This signing is an enormous validation of your laborious work and pioneering spirit,” Trump mentioned through the signing ceremony, which included a number of crypto executives.
Beneath the legislation, stablecoins have to be totally backed by liquid belongings, together with US {dollars} and short-term Treasury payments. Issuers will likely be required to publicly disclose the composition of their reserves every month.
The legislation is seen as a major victory for crypto advocates, who’ve lobbied for a transparent regulatory framework for years. The transfer goals to supply certainty for the sector, encourage innovation and attract mainstream establishments and customers.
MARKET IMPACT AND CRITICISM
The stablecoin market, at present valued at greater than US$260 billion in response to CoinGecko, might increase to US$2 trillion by 2028, Customary Chartered estimated earlier this yr.
Business gamers argue the legislation will improve stablecoins’ credibility and facilitate their use by banks, retailers and customers for fast funds. Some crypto companies, together with Circle and Ripple, are already pursuing banking licenses to allow quicker, lower-cost settlement and improve belief.
Nonetheless, critics say the laws falls brief on a number of fronts. Democrats and shopper advocates argue it lacks sturdy anti-money laundering protections and fails to limit tech giants or overseas entities from issuing their very own stablecoins, elevating considerations over market focus and regulatory oversight.
The legislation’s passage follows an aggressive lobbying push by the crypto sector, which spent greater than US$245 million within the 2024 election cycle backing pro-crypto candidates, together with Trump, in response to Federal Election Fee knowledge.
