Trump Signs Law to Regulate Cryptocurrency
WASHINGTON – President Donald Trump signed legislation on Friday establishing a regulatory framework for cryptocurrencies, specifically targeting Stablecoins.
The bill, named the Genius Act, received bipartisan support in the House of Representatives, passing with 308 votes to 122. This included backing from nearly half of the Democrats and a majority of Republicans. The Senate had already approved the bill.
This legislation marks a significant win for cryptocurrency supporters who have long sought a formal regulatory system to enhance the industry’s legitimacy. Since its inception in 2009, the crypto world has been seen as a chaotic frontier characterized by innovation and speculative ventures.
At the signing event, which featured numerous government officials, crypto leaders, and lawmakers, Trump remarked, “This signature is a massive verification of your hard work and pioneering spirit. It’s good for the dollar and good for the country.”
Treasury Secretary Scott Bescent noted that the new law aims to bolster the dollar’s position as a global reserve currency, broaden access to the dollar economy, and heighten demand for a stable Treasury.
Stablecoins are typically pegged to the dollar, providing stability for traders moving funds between tokens. The aim is to facilitate mainstream payments for instant transactions.
The new law mandates that Stablecoins be backed by liquid assets like dollars and short-term government bonds, with issuers required to maintain monthly reserve disclosures.
Crypto business leaders argue that such regulations will boost the reliability of Stablecoins, encouraging banks, retailers, and consumers to adopt them more widely.
According to Crypto Data Provider Coingecko, the Stablecoin market is currently valued at over $260 billion and could potentially reach $2 trillion by 2028, based on estimates from Standard Chartered Bank earlier this year.
The legislation was influenced by significant financial contributions, with over $245 million invested in last year’s elections, as reported by the Federal Election Commission.
Trump, who has introduced his own cryptocurrency, expressed gratitude to industry executives for their backing ahead of the 2024 presidential election, claiming, “We have pledged to regain American freedom and leadership and make the United States the code capital of the world.”
However, some Democrats and critics have raised concerns that this law could allow for the issuance of new types of Stablecoins, potentially increasing the power of the already dominant sector.
One critic stated, “By closing known loopholes and failing to protect America’s digital dollar infrastructure, Congress risks making the US financial system a global haven for leveraging criminals and hostile regimes.”
Impact on Demand for Government Debt
While large banks weigh their options for entering the cryptocurrency space as regulatory support strengthens, major institutions are reportedly focusing on pilot programs, partnerships, or limited crypto transactions.
Several crypto firms, including Circle and Ripple, are in pursuit of banking licenses, aiming to reduce costs by bypassing intermediary banks.
Proponents of the bill argue it could generate increased demand for short-term government debt, as Stablecoin issuers would need to acquire more government bonds to back their assets.
Trump has been actively reviewing cryptocurrency policies and sought to enact an executive order in March to create a strategic Bitcoin Reserve.
Earlier this year, he launched a meme coin known as $Trump and holds partial ownership in the Crypto Company World Liberty Financial.
