Trump signs 'GENIUS Act': How it will reshape digital wallets
What's the story
US President Donald Trump has signed the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act), a landmark bill to regulate cryptocurrency. The legislation, which passed the House yesterday, is the first major law governing digital currency and establishes a regulatory framework for the $250 billion stablecoin market. The White House says this act prioritizes consumer protection, strengthens the US dollar's reserve currency status, and bolsters national security.
Regulatory framework
Comprehensive regulatory framework for 'payment stablecoins'
The GENIUS Act provides a comprehensive regulatory framework for the issuance of "payment stablecoins" and defines which digital currencies can be termed as such. With this law, banks, non-banks, and credit unions can enter the market by issuing their own stablecoins. Stablecoins are cryptocurrencies designed to maintain a stable value, usually pegged to fiat currencies like the US dollar, as per JP Morgan.
Consumer protection
Legitimizing stablecoins
The GENIUS Act also mandates a 1:1 reserve in high-quality liquid assets such as Treasury bills and Federal Reserve deposits. It requires anti-money laundering programs, prohibits interest payments, and calls for regular audits. This way, stablecoins gain legitimacy and become more trustworthy. The legislation is seen by the Trump administration and crypto community as a way of bringing digital currency into the mainstream financial system.
Market impact
Act opens doors for private firms to issue stablecoins
The GENIUS Act opens doors for private firms to issue stablecoins, a type of privately issued digital money. It lays down specific requirements for companies that issue stablecoins, such as complying with anti-money laundering laws and monitoring/reporting suspicious activity. The act could lead to a surge in privately issued stablecoins, potentially forcing consumers to use different currencies at different places they shop.
Legislative progress
Lawmakers approve 2 other cryptocurrency bills as well
Along with the GENIUS Act, lawmakers also approved two other cryptocurrency bills, capping what Republicans dubbed "Crypto Week" in Congress. The Clarity Act will regulate digital commodities beyond stablecoins, and the Anti-CBDC Surveillance State Act prevents the Federal Reserve from issuing any retail central bank digital currency directly to Americans. These moves mark a major step forward in regulating and mainstreaming cryptocurrencies in America.