Bloomberg—President Donald Trump signed the first federal law regulating stablecoins, calling it "a major step in consolidating America's dominant position in global finance and cryptocurrency technology," while also bringing significant victories for the digital asset industry.
"The (GENIUS Act) builds a clear and concise regulatory framework, laying the foundation for the development and tremendous potential of dollar-backed stablecoins," Trump said at the signing ceremony at the White House, "This may be the greatest revolution in financial technology since the birth of the Internet."
The initiative establishes regulatory rules for dollar-backed stablecoins, including requiring companies to hold short-term government bonds or similar products supervised by state or federal regulators in a 1:1 ratio as reserves. Supporters believe this will promote broader applications of digital assets in finance.
Earlier, senior officials from the Treasury introduced the bill to reporters on an anonymous basis, stating that it would provide more safeguards for stablecoin issuers, promote innovation and application of digital assets, and help expand the influence of the U.S. dollar. They also noted that the bill would set strict requirements for issuers, mandating that reserves backing stablecoins must be in cash or short-term government bonds.
Trump stated that this initiative "will ensure the dollar's position as the world's reserve currency" and added that losing this status "is like losing a world war."
He stated, "With the privacy, flexibility, and decentralization that cash offers, this revolution is expected to drive U.S. economic growth and enable billions of people to save and transfer money using the dollar."
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For this emerging industry, which Trump once viewed with skepticism but now supports, the passage of the bill signifies a shift in its political status. This legislation is the core component of the 'Cryptocurrency Week' advocated by the president.
Among those attending the ceremony with Trump were executives from the technology and cryptocurrency industries, including Brian Armstrong of Coinbase Global Inc. (COIN), Vlad Tenev of Robinhood Markets Inc., billionaire twins Cameron Winklevoss and Tyler Winklevoss of Gemini, and Chris Pavlovski of Rumble Inc. (RUM).
"This signing is a great recognition of your hard work, pioneering spirit, and never-give-up attitude," Trump told the executives from the cryptocurrency industry.
Once, Sam Bankman-Fried's FTX cryptocurrency exchange collapsed, shocking the industry. The signatories of the bill stated that the industry would now welcome a predictable regulatory environment, granting legitimacy to such assets.
After months of effort, the bill gained broad bipartisan support in the House of Representatives. However, conservative lawmakers once obstructed the bill's passage, demanding the inclusion of a clause to prohibit the Federal Reserve from issuing digital currency. Hardline lawmakers ultimately dropped their obstruction after meeting with Trump at the White House—House leadership assured them that provisions related to central bank digital currency would be included in a defense authorization bill by the end of the year.
Democrats had attempted to include a clause in the bill prohibiting elected officials and their families from participating in stablecoin companies, but were unsuccessful. This clause could affect Trump and his family, as they have ties to digital asset companies such as World Liberty Financial, which has its own token and stablecoin brand. Some Democratic critics warned that the bill does insufficiently protect consumers and that a collapse of these digital tokens could lead to pressure for government bailouts.
The passage of this bill marks that cryptocurrency investors and executives have become a political force. In the 2024 elections, they support candidates friendly to the industry through well-funded political action committees. Trump received strong support from the cryptocurrency industry during this process.
Trump appointed David Sacks, a venture capitalist from Craft Ventures LLC, as the White House's first head of artificial intelligence and cryptocurrency affairs.
In March of this year, the president hosted industry leaders at the White House and signed an executive order requiring the establishment of strategic reserves for Bitcoin and other digital assets. His administration also committed to promoting crypto-friendly regulators and dismissed or paused lawsuits and investigations against companies such as Coinbase, Robinhood, Uniswap Labs, and OpenSea.
"I solved too many problems for you," Trump said to the executives present at the ceremony.
