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 take care of 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 practically half of Democrats.
“This signing is an enormous validation of your exhausting work and pioneering spirit,” Trump mentioned throughout the signing ceremony, which included a number of crypto executives.
Below the legislation, stablecoins have to be totally backed by liquid property, together with US {dollars} and short-term Treasury payments. Issuers might be required to publicly disclose the composition of their reserves every month.
The legislation is seen as a big 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 keeping with CoinGecko, might broaden to US$2 trillion by 2028, Commonplace Chartered estimated earlier this 12 months.
Business gamers argue the legislation will improve stablecoins’ credibility and facilitate their use by banks, retailers and shoppers 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.
Nevertheless, critics say the laws falls quick on a number of fronts. Democrats and client advocates argue it lacks sturdy anti-money laundering protections and fails to limit tech giants or international 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 keeping with Federal Election Fee information.
