Trump Signs GENIUS Act Establishing First Federal Stablecoin Framework

After a volatile legislative battle, Donald Trump signed the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act into law on July 18, 2025. The legislation establishes the first comprehensive federal regulatory framework for payment stablecoins, requiring issuers to maintain 1:1 reserves in liquid assets like U.S. dollars or short-term Treasuries and undergo regular audits. The law removes stablecoins from the direct oversight of the SEC and CFTC, splitting supervision between the Federal Reserve, the Office of the Comptroller of the Currency, and the FDIC for large issuers, while allowing certified state regulators to oversee smaller entities.

The path to enactment was marked by a multi-day stalemate in the House of Representatives during a designated Crypto Week. A faction of Republican hardliners, including Representative Marjorie Taylor Greene, initially blocked procedural votes, demanding a ban on central bank digital currencies (CBDCs) be integrated into the stablecoin bill. Trump personally intervened, meeting with dissenting lawmakers in the Oval Office to broker a deal. The impasse ended when GOP leadership agreed to attach the Anti-CBDC Surveillance State Act to the National Defense Authorization Act instead of merging it with the GENIUS Act.

Following the signing, the global cryptocurrency market capitalization hit $4 trillion, and Bitcoin surged past $120,000. Major financial institutions, including JPMorgan and Citigroup, began developing compliant stablecoin products. However, critics, led by Senator Elizabeth Warren and Representative Maxine Waters, warned that the law contains loopholes for Big Tech and fails to address potential conflicts of interest regarding the Trump family's stake in World Liberty Financial.