Trump Signs Law Establishing Regulatory Framework for US Dollar-Based Stablecoins

President Donald Trump has signed the GENIUS Act, establishing a regulatory framework for US dollar-based stablecoins. The legislation, which passed the House of Representatives with a 308 to 122 vote after Senate approval, aims to facilitate the regular use of stablecoins for payments and money transfers.

At the signing ceremony, Trump remarked, "The GENIUS Act, they named it after me," and described the law as beneficial for both the US dollar and the country. He also acknowledged support from the cryptocurrency industry, stating, "That's why I backed you at an early stage. And I also did it for the votes."

The new law is seen as a significant milestone for the cryptocurrency sector, which has advocated for regulatory clarity to encourage broader adoption by banks, retailers, and consumers. Industry groups contributed over $245 million to last year's elections in support of pro-crypto candidates, including Trump.

Stablecoins are digital assets designed to maintain a stable value, typically pegged 1:1 to the US dollar and backed by liquid assets as required by the new law. The stablecoin market is currently valued at over $260 billion, with projections from Standard Chartered suggesting it could reach $2 trillion by 2028. Treasury Secretary Scott Bessent stated that the technology "will buttress the dollar’s status as the global reserve currency, expand access to the dollar economy for billions across the globe, and lead to a surge in demand for US Treasuries, which back stablecoins."

Critics of the law argue that it lacks sufficient anti-money laundering measures and does not prohibit foreign stablecoin issuers. Scott Greytak, deputy executive director of Transparency International US, said, "By failing to close known loopholes and protect America’s digital dollar infrastructure, Congress has risked making the US financial system a global haven for criminals and adversarial regimes to exploit."

Earlier this year, Trump signed an executive order to establish a strategic bitcoin reserve. He also has partial ownership in a crypto company and launched a meme coin called $TRUMP in January.