Key Insights
- President Trump has signed the GENIUS Act, the first federal law regulating stablecoins, requiring full asset backing, annual audits, and strict compliance measures for issuers.
- The bill received bipartisan support in Congress and was celebrated at a White House ceremony attended by top crypto executives and Republican leaders.
- Critics warn the bill creates a pathway to a CBDC-like surveillance system, raising privacy concerns despite its presentation as private-sector crypto regulation.
WASHINGTON (MarketsXplora) — U.S. President Donald Trump on Friday signed into law the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, marking the first federal legislation to regulate stablecoins and signaling a historic shift in the government’s approach to digital assets.
The GENIUS Act lays the foundation for a formal regulatory framework governing U.S. dollar-pegged stablecoins, setting requirements for full asset backing, annual audits, and oversight of both domestic and foreign issuers. The bill passed the Senate with a 68-30 vote and cleared the House on Thursday with a bipartisan 308-122 majority.
Flanked by top crypto executives and senior Republican leaders at a White House ceremony, Trump hailed the legislation as a “massive validation” for the crypto industry and a “giant step to cement American dominance of global finance and crypto technology.”
“They’ve come a long way since the Biden administration, when they had no idea what you all were talking about and half of you were under arrest for no reason,” Trump said, drawing laughter from the crowd.
Crypto Leaders Applaud Passage of GENIUS Act
The signing event was attended by prominent figures from the digital asset industry, including Coinbase CEO Brian Armstrong, Tether CEO Paolo Ardoino, Circle CEO Jeremy Allaire, Kraken’s David Ripley, the Winklevoss twins of Gemini, and Robinhood CEO Vladimir Tenev. Vice President JD Vance and House Speaker Mike Johnson were also present, underscoring the bill’s backing at the highest levels of Republican leadership.
“GENIUS is the first major digital asset legislation to clear Congress after years of public and private effort led to this bipartisan milestone,” said Anchorage Digital CEO Nathan McCauley.
Allaire posted en route to the White House: “Global financial system, welcome to the Internet!”
The GENIUS Act mandates that stablecoins be fully backed by U.S. dollars or similarly liquid assets and introduces annual audit requirements for issuers with a market cap exceeding $50 billion. It also outlines rules for foreign stablecoin entities, drawing attention to potential national security concerns raised by some Democratic lawmakers.
Rep. Maxine Waters, the top Democrat on the House Financial Services Committee, warned the bill leaves room for foreign firms that could pose security risks. She also highlighted a potential conflict of interest involving World Liberty Financial USD — a stablecoin linked to Trump’s family business.
“It leaves the door open for foreign firms that present a major national security threat, including targets of sanctions, all to appease those in the Trump family’s inner circle,” Waters said.
Is the GENIUS Act a Trojan Horse for a Digital Dollar?
Despite the celebratory tone at the White House, some lawmakers and Bitcoin advocates voiced strong opposition, arguing the bill paves the way for a government-controlled financial system under the guise of private innovation.
Representative Marjorie Taylor Greene called GENIUS a “backdoor” central bank digital currency (CBDC), citing the surveillance capabilities built into the stablecoin compliance requirements. She accused the Federal Reserve of using regulated stablecoins as a tool to usher in a “cashless society.”
“This bill regulates stablecoins and provides for the backdoor central bank digital currency… that can be weaponized against you by an authoritarian government controlling your ability to buy and sell,” Greene warned in a post on X.
Crypto analyst Justin Bechler echoed the concerns, calling GENIUS a framework that forces stablecoins into “CBDC compliance and control.” Others, like Jean Rausis of Smardex, noted that centralized oversight allows for transaction rollbacks and censorship, making these coins “indistinguishable from a CBDC.”
The legislation was amended in March to include stricter Anti-Money Laundering, sanctions compliance, and Know Your Customer (KYC) rules — regulatory features that critics say entrench financial surveillance.
A First Step With Broader Implications
While the GENIUS Act exclusively targets stablecoins and leaves broader digital asset regulation untouched, analysts believe it could serve as a blueprint for future crypto legislation. Enforcement details are yet to be fully developed and may extend into the next administration, leaving many in the sector awaiting clearer definitions from banking and financial regulators.
“By moving from regulation through enforcement to clear rules, the U.S. will strengthen its place as a global leader in cryptocurrencies,” said Yuval Rooz, CEO of Digital Asset. “Other countries may follow.”
Earlier this year, Trump repealed a controversial crypto tax rule finalized at the end of the Biden administration. That rule had imposed stricter requirements on custodial brokers to report user data to the IRS.
As of July 18, Tether’s USDT accounted for $162 billion in the total stablecoin supply, while Circle’s USDC stood at $63 billion, according to CoinMarketsCap. The GENIUS Act will now shape the legal and operational landscape for these market leaders and potentially welcome Wall Street players into the fray.
“This is only the beginning,” one senior official at the signing said. “But it’s the beginning the industry has waited a long time for.”