Trump Signs GENIUS Act, Creating First US Federal Framework for Stablecoins

On July 18, 2025, President Donald Trump signed the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act) into law, establishing the first comprehensive federal regulatory framework for payment stablecoins in the United States. The bill passed the Senate on June 17, 2025 by a bipartisan 68-30 vote and the House of Representatives on July 17, 2025 by a vote of 308-122, marking the first time stablecoin-specific legislation had cleared either chamber of Congress.

The law creates a licensing regime for "payment stablecoin" issuers, requiring them to hold reserves on a one-to-one basis in cash or short-dated U.S. Treasury instruments and to publish regular, public disclosures of those reserves. It permits both federal and state-level oversight pathways, with issuers below a $10 billion market-cap threshold generally eligible to operate under qualifying state regulatory regimes, while larger issuers fall under federal supervision.

Under the statute, full compliance obligations take effect on whichever comes first: 18 months after enactment, or 120 days after primary federal regulators finalize implementing rules — meaning the practical compliance deadline for most issuers is expected to land in late 2026 or 2027 depending on rulemaking timelines.

The new framework reshaped competitive dynamics between the two largest stablecoin issuers. Circle's USDC, already positioned around audited, dollar-reserve-backed transparency, gained market share as institutions favored issuers seen as compliance-ready, while Tether's USDT — which has historically faced criticism over reserve transparency — came under increased pressure to match equivalent audit and disclosure standards to maintain access to U.S. markets and platforms.

Reaction to the law's passage was largely framed as a turning point after years of U.S. crypto policy conducted primarily through enforcement actions rather than legislation, with supporters citing it as evidence of a maturing regulatory approach; critics raised concerns about consumer protections for offshore issuers and the broader implications of banks and fintechs entering the stablecoin-issuance business at scale.