Trump signs stablecoin act into law in effort ‘to lead global digital currency revolution’
US president Donald Trump has signed a law to establish a federal regulatory regime for stablecoins in a move closely watched by public- and private-sector fintech and payments specialists worldwide.
The law was signed after the House of Representatives passed the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act) on 17 July by 308 votes to 122 during what US lawmakers dubbed ‘Crypto Week’ in Washington DC. The Senate had already given its approval last month.
As Trump signed the act into law (18 July), the White House released a ‘fact-sheet’ describing GENIUS as a ‘historic piece of legislation that will pave the way for the United States to lead the global digital currency revolution.’
The GENIUS Act “prioritises consumer protection, strengthens the US dollar’s reserve currency status and bolsters our national security,” the White House stated in the fact-sheet, adding that the law “will make America the undisputed leader in digital assets, bringing massive investment and innovation to our country”.
Trump backed the GENIUS Act “because it protects consumers from nefarious actors in financial markets,” the White House said, explaining that the law – which requires stablecoins to have 100% reserve backing with “liquid assets like US dollars or short-term treasuries and requires issuers to make monthly, public disclosures of the composition of reserves” – will “ensure [stablecoins’] stability and trust through strong reserve requirements”.
STABLECOINS EXPLAINED: Stablecoins are cryptocurrencies designed to maintain a stable value by having their market value pegged to an external reference, typically traditional currencies. The world’s two biggest stablecoins (by market capitalisation) are Tether and USD Coin – both are, like most stablecoins, pegged to the US dollar.
Stroke of GENIUS? The White House used X (formerly Twitter) to promote the president’s signing of the law
Read more: Crypto Week kicks off in US with ‘landmark’ digital asset legislation in global spotlight
‘Backstop of consumer protection’
Under the new law, stablecoin issuers “must comply with strict marketing rules to protect consumers from deceptive practices”, the White House stated, explaining that “they are forbidden from making misleading claims that their stablecoins are backed by the US government, federally insured or legal tender”.
The GENIUS Act “aligns” state-level and federal stablecoin frameworks, “ensuring fair and consistent regulation throughout the country”, its fact-sheet continued.
In the event of a stablecoin issuer’s insolvency, the GENIUS Act “prioritises stablecoin holders’ claims over all other creditors, ensuring a final backstop of consumer protection,” it added.
On the matter of strengthening the US dollar’s reserve currency status, the fact-sheet stated that the GENIUS Act will “generate increased demand” for US government debt.
In respect of boosting fintech-related innovation, the government said the GENIUS Act will “play a key role in attracting more digital asset activity to the country by providing clear rules and promoting responsible innovation in the stablecoin market”.
On the challenge of “combating illicit activity in digital assets”, the White House highlighted the new law explicitly subjects stablecoin issuers to the Bank Secrecy Act, “thereby clearly obligating them to establish effective anti-money laundering and sanctions compliance programmes with risk assessments, sanctions list verification and customer identification”; and also improves the Treasury Department’s ability to tackle illicit stablecoin activities by “enhancing its sanctions evasion and money laundering enforcement capabilities”.
US TREASURY BILLS EXPLAINED: Treasury bills are short-term securities with five term options, from four weeks up to one year. Investors receive interest when the asset matures.
Clarity and Anti-CBDC Act head to Senate
Trump signed an executive order titled ‘Strengthening American Leadership in Digital Financial Technology’ and has since undertaken numerous pro-crypto actions, including hosting a Digital Assets Summit (also referred to as ‘Crypto Summit’) at the White House.
The fact-sheet describes Trump’s signing of the GENIUS Act as “fulfilling his campaign promise to position America as the global leader in cryptocurrency”.
House of Representatives financial services committee chairman French Hill, alongside agriculture committee chairman GT Thompson and the House leadership, awarded the moniker Crypto Week to 14-18 July, as the week also included votes on two further pieces of fintech-related legislation: the Digital Asset Market Clarity Act (Clarity Act), which aims to establish a comprehensive regulatory framework for digital assets and cryptocurrencies; and the Anti-CBDC Surveillance State Act, which aims to block the issuance of a retail central bank digital currency (CBDC) – a digital dollar.
The House of Representatives also passed the Clarity Act (294 votes to 134) and Anti-CBDC Act (219 votes to 210) on 17 July. These bills are both now heading to the Senate.
The GENIUS Act will not take effect immediately. It takes effect on the earlier of either the date that is 18 months after the enactment of the act (which would be 18 January 2027) or 120 days after the date on which the main federal payment stablecoin regulators issue any final regulations implementing the act.
House of Representatives financial services committee chairman French Hill and Bryan Steil – who chairs the House of Representatives financial services sub-committee on digital assets, financial technology and artificial intelligence – posted a video on X (formerly Twitter) on 17 July
Global developments
States across the US have also been pushing their own stablecoin regulations and initiatives. Notable among these are Wyoming, which is aiming to issue the first fiat-backed, fully-reserved stablecoin issued by a public entity in the US (the ‘Wyoming Stable Token’) – a groundbreaking digital money programme for the public sector.
In respect of the global picture, the US has lagged the European Union in respect of agreeing crypto-related laws. The 27-member EU’s landmark Markets in Crypto-Assets (MiCA) regulation (also abbreviated to MiCAR) came into full force in December 2024.
In the UK, the Financial Conduct Authority (FCA) opened a consultation on 28 May seeking views on proposed rules and guidance on stablecoin issuance and cryptoasset custody (the consultation closes on 31 July). This followed the UK’s publication of draft cryptoassets regulation in April.
Digital asset and fintech sector representatives at an event in London in March spoke of a “clamour” among companies for greater regulatory certainty to further encourage global take-up of stablecoins.
“MiCA’s done a really good job in Europe, and when we look at what’s happening in the US [momentum under the Trump presidency], it really helps drive the conversation,” Varun Paul, senior director for financial markets at Fireblocks, a New York City-headquartered digital assets infrastructure company, said (on the topic of stablecoin regulation globally) at the ‘Stablecoin Symposium’ event. “We’re seeing – all over the world right now – industry participants trying to engage with the regulator[s] and [saying] “give us a clear roadmap” because without it the banks and the non-banks in the same space don’t know where they stand; don’t know what the rules should be and whether they’ll get in trouble for it. But they’re all asking because they can see the opportunity.”
This article was intitially published by Global Government Forum’s sister title Global Government Fintech: Trump signs stablecoin act into law as Washington steps on crypto gas
About Ian Hall
Ian is editor of Global Government Fintech a sister publication to Global Government Forum. Ian also writes for media including City AM and #DisruptionBanking. He is former UK director for the pan-European media network Euractiv (2011-2018), editor of Public Affairs News (2007-2011) and news editor of PR Week (2000-2007). He was shortlisted for ‘Editor of the Year’ at the British Society of Magazine Editors (BSME) Awards in 2010. He began his career in Bulgaria at English-language weekly the Sofia Echo. Ian has an MA in Urban and Regional Change in Europe and a BA in Economics, both from Durham University.
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