In a landmark move for digital finance, U.S. President Donald Trump signed the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) into law on July 18, 2025. This is the first major federal law to regulate stablecoins—cryptocurrencies pegged to traditional assets like the U.S. dollar.
Under the Act, only approved financial institutions, such as regulated banks or licensed crypto firms, will reportedly be allowed to issue stablecoins. These digital assets must be 100% backed by safe, liquid reserves like cash or U.S. Treasuries. Issuers will apparently be required to publish monthly reserve reports, undergo audits, and follow anti-money laundering rules.
A Ripple Across Global Economies
The GENIUS Act is expected to bolster trust in U.S.-issued stablecoins, giving the country a stronger position in the digital asset economy. Analysts say it may increase demand for U.S. Treasuries, helping the government finance debt while reinforcing the dollar’s global dominance.
However, some economists warn of risks. If users rush to cash out during a crisis, stablecoin issuers could be forced to sell huge volumes of government bonds, potentially shaking up markets. Others are concerned that the law could give too much control to a few large financial players.
Outside the U.S., the reactions are mixed. In the UK, some lawmakers are not too optimistic, fearing Britain could fall behind without similar regulations. Meanwhile, in India, crypto industry leaders see the GENIUS Act as a blueprint for responsible innovation. Countries in the EU and Asia are now expected to accelerate their own stablecoin frameworks.
Crypto Market Responds
The cryptocurrency market has responded swiftly. While Bitcoin saw a slight dip, other tokens like Ethereum and Solana rose, fueled by optimism over regulatory clarity. Experts claim the U.S. stablecoin market, currently worth around $250 billion, could grow tenfold in the next decade under this legal umbrella.
What’s Next?
U.S. regulators, including the Federal Reserve and Treasury Department, must now build detailed rules around the Act. The GENIUS Act could either become a global model for safe crypto innovation or a source of new financial stress if not implemented carefully.
It is worth noting that the law isn’t taking effect immediately. Regulators now have up to 18 months to finalize rules, meaning it could go fully live by early 2027. But its impact is already being felt.
