In a historic vaulted moment for digital assets, the U.S. House of Representatives has approved the bipartisan GENIUS Act, a landmark piece of legislation that establishes the first federal regulatory framework for U.S.-dollar-backed stablecoins. With President Trump expected to sign it into law imminently, the GENIUS Act places regulatory authority under the Commodity Futures Trading Commission (CFTC) and key banking agencies, while setting stringent reserve, audit, and disclosure standards. The bill marks a watershed for the crypto industry, creating a structured environment for safe consumer adoption and institutional use.
Passed by a decisive 308–122 vote, the GENIUS Act follows an earlier 68–30 vote in the Senate on June 17, making it the first major federal crypto bill to clear both chambers ([turn0search30]; [turn0search4]). This legislation addresses longstanding calls from stablecoin issuers and investors for clarity and oversight, particularly after high-profile collapses like Terra-Luna and Tether’s settlement with regulators.
The bill is now awaiting President Trump’s signature, a step that would transform it into law and signal clear U.S. regulatory commitment to stablecoins—potentially catalyzing industry growth and legitimacy.
Per analysis by Morgan Lewis, WilmerHale, and Gibson Dunn, the act outlines a comprehensive regime for “payment stablecoins”—digital tokens pegged to the U.S. dollar intended to function as a means of payment or settlement ([turn0search5]; [turn0search1]; [turn0search3]):
- Permitted Issuers Only
Only qualified entities—subsidiaries of insured U.S. depository institutions or federally/state-supervised issuers—may issue stablecoins. Foreign issuers may only operate in the U.S. if they comply with comparable standards and successor oversight ([turn0search5]; [turn0search3]). - 1:1 Reserve Requirement
Issuers must maintain full reserve backing with U.S. dollars, insured deposits, or short-term Treasuries. No fractional backing or risky asset reserves allowed ([turn0search5]; [turn0search2]; [turn0search7]). - Regular Audits & Disclosures
Issuers must perform monthly independent audits and submit regular financial reports, ensuring real-time transparency ([turn0search2]; [turn0search7]). - Prohibition on Interest Payments
Issuers are barred from offering yield on stablecoin holdings to prevent them from operating like money-market funds ([turn0search11]; [turn0search2]). - Federal & State Dual Oversight
Federal qualified issuers fall under OCC or Fed supervision, while smaller issuers can operate under certified state regimes. A Treasury-led Certification Review Committee oversees comparability standards ([turn0search11]; [turn0search5]). - Clearing the Gray Zone
The bill defines stablecoins as neither securities nor commodities, reducing SEC or CFTC overlap—but it gives the SEC oversight of trading platforms where permitted stablecoins are exchanged ([turn0search7]; [turn0search15]). - Foreign Issuer Access Conditions
Foreign issuers must register with OCC and meet U.S. oversight standards to operate domestically ([turn0search3]; [turn0search5]). - Effective Dates & Transition Period
The framework goes into effect by January 2027, with a three-year transition for platforms to comply—stablecoin issuance is cleared for permitted entities in the interim ([turn0search7]).
Proponents argue the GENIUS Act balances innovation and consumer protection, injecting confidence into payment applications and pushing institutional adoption. Treasury Secretary Scott Bessent projected that the stablecoin market could grow to $1.6–2 trillion by 2030, creating appetite for government-backed infrastructure investment ([turn0news29]; [turn0news26]; [turn0news27]).
However, critics from consumer advocacy groups, including Consumer Reports and Rep. Maxine Waters, warned that it gives too much leeway to big tech and lacks anti-conflict safeguards—especially with reports tying stablecoin issuance to Trump’s financial stake via World Liberty Financial ([turn0search30]; [turn0search33]; [turn0news28]; [turn0news27]). Some also questioned whether fundamental structural risks—such as systemic impacts during stablecoin runs—were adequately addressed ([turn0news19]; [turn0search2]).
Crypto markets reacted swiftly: Bitcoin climbed above $119–120K, Ethereum rose over 3%, and tokens linked to DeFi and stablecoins surged. Stocks of firms like Circle and Coinbase rallied after the House vote, with crypto-mining and treasury-backed companies posting double-digit gains ([turn0search6]; [turn0news26]; [turn0news17]).
Investopedia noted that the announcement sparked widespread inflows into crypto ETFs, with Bitcoin and Ethereum experiencing sharp boosts following Trump’s support statements ([turn0search6]; [turn0search7]).
- Consumer confidence: With reserve audits and transparency required, users can trust stablecoin issuers more than ever.
- Institutional use cases: Clearer rules may unlock payment use across remittances, DeFi, and smart contract platforms in a safe and regulated manner.
- Stablecoin competition: Traditional banks and credit unions are now authorized to issue stablecoins alongside emerging private actors.
- Dollar dominance support: Linking stablecoins to the dollar bolsters U.S. influence in global digital finance—as noted in Reuters and El País coverage highlighting dollar-backed stablecoins boosting banking and finance ([turn0news19]; [turn0news17]).
- Senate action on related bills – The House also passed the CLARITY and Anti‑CBDC bills, which must clear the Senate ([turn0news20]; [turn0news18]).
- Rule-making – Major agencies, including Federal banking regulators, OCC, and Treasury, will need to draft implementing regulations.
- Industry adjustments – Exchanges, wallets, and FinTech platforms have a three-year window to adapt to compliance requirements.
- Continued oversight – Close monitoring of implementation and of whether the law affords undue advantage to certain issuers or backers—particularly amid conflict-of-interest scrutiny—is critical.
The passage of the GENIUS Act represents a historic turning point for digital assets in the U.S. Long hailed as critical by industry voices, its firm passage provides legitimacy and structural certainty not seen since the emergence of U.S. Bitcoin ETFs.
By mandating reserve standards, auditability, and regulatory oversight, the act reshapes the stablecoin landscape—not just as a compliance milestone, but as a foundation for broader crypto adoption in finance and payments.
Still, skeptics caution it’s no panacea—implementation, equity across issuers, and market access will determine whether the GENIUS Act becomes a genuine enabler of stablecoin innovation—or a regulatory framework that consolidates power.