The **stablecoin law** in the United States, officially known as the **GENIUS Act**, was passed by Congress in July 2025 and signed into law by President Donald Trump shortly thereafter. This legislation establishes the first-ever federal regulatory framework specifically for stablecoins—cryptocurrencies pegged to the U.S. dollar or other stable assets to maintain a stable value.
Key points of the law include:
- **Backing Requirements:** Stablecoin issuers must hold a 1:1 reserve of liquid assets such as U.S. dollars and short-term Treasury bills to fully back the stablecoins they issue. This mandate ensures that if a user redeems a stablecoin for $1, the issuer has $1 in reserve to cover it.
- **Transparency:** Issuers are required to publicly disclose their reserve assets monthly, providing full transparency about the backing and composition of the stablecoins.
- **Compliance:** The law enforces compliance with existing U.S. anti-money laundering and sanctions laws for stablecoin issuers, integrating stablecoins more fully into the regulatory framework of traditional finance.
- **Bipartisan Support:** The legislation received strong bipartisan support, reflecting recognition of stablecoins' growing role in payments and finance.
The GENIUS Act aims to reduce risks in the $265 billion stablecoin market and facilitate broader adoption of these digital assets in mainstream financial systems. Stablecoins function as a bridge between traditional fiat currencies and more volatile cryptocurrencies like Bitcoin, helping users conduct immediate payment transactions with lower value fluctuation. This law marks a significant step in legitimizing and stabilizing the stablecoin sector within U.S. and global financial markets.
