President Donald Trump officially signed the "Guiding and Establishing National Innovation for U.S. Stablecoins" (GENIUS) Act into law on Friday, July 18, 2025. This landmark legislation marks the first federal regulatory framework for stablecoins in the United States.

Here's a breakdown of what the GENIUS Act entails:

* Focus on Stablecoins: The primary aim of the GENIUS Act is to establish a clear and simple regulatory system specifically for stablecoins. These are cryptocurrencies whose value is pegged to stable assets like the U.S. dollar, designed to reduce price volatility compared to other digital assets.

* Consumer Protection: The act prioritizes consumer protection by implementing strong reserve requirements for stablecoin issuers. It mandates 100% reserve backing with liquid assets such as U.S. dollars or short-term Treasuries, and requires monthly, public disclosures of reserve composition. It also prohibits misleading claims that stablecoins are backed by the U.S. government, federally insured, or legal tender.

* Combating Illicit Activity: Through regulation and registration of stablecoin issuers, and coordination with the Treasury Department on sanctions enforcement, the GENIUS Act aims to bolster national security and improve the ability to combat illicit stablecoin activities, including sanctions evasion and money laundering.

* Strengthening the U.S. Dollar: President Trump and supporters of the bill believe the GENIUS Act will help cement the U.S. dollar's status as the world's reserve currency by allowing for its "onchain" presence and increasing demand for U.S. Treasuries.

* Regulatory Framework: The legislation creates a legal category for stablecoins and establishes clear boundaries for which digital currencies can be referred to as stablecoins. It allows banks, nonbanks, and credit unions to issue their own stablecoins.

* Bipartisan Support: The GENIUS Act passed both the House and Senate with significant bipartisan support, indicating a broad consensus on the need for stablecoin regulation.

* Opposition to CBDC: President Trump has also reaffirmed his strong opposition to the creation of a Central Bank Digital Currency (CBDC) by the Federal Reserve, calling it a "surveillance state" tool. The House has passed a separate bill, the "Anti-CBDC Surveillance State Act," which would prohibit the Fed from issuing a retail CBDC directly to Americans.

The signing of the GENIUS Act is seen as a major victory for the cryptocurrency industry and a significant step toward making digital assets more mainstream in the U.S. It aims to provide regulatory clarity, foster innovation, and attract investment to the country's digital asse

t sector.