• Trump signed the GENIUS Act, establishing a regulatory framework for stablecoins.
• The act allows stablecoins, pegged to the US dollar, to become more mainstream.
• The bill received bipartisan support in Congress with a vote of 308 to 122.
• Industry advocates say the law boosts legitimacy and consumer protections for stablecoins.

On July 18, President Donald Trump signed the GENIUS Act, marking a pivotal moment for the cryptocurrency sector by establishing federal regulations specifically for stablecoins. These cryptocurrencies are designed to maintain a fixed value typically pegged to the US dollar, and the new law aims to provide clarity and legitimacy for the fast-growing industry, which has faced uncertainty over regulatory oversight. The act passed the House of Representatives with overwhelming bipartisan support, receiving 308 votes in favor and 122 against, and subsequently cleared the Senate, according to ABC News and Channel News Asia.

During the signing ceremony, Trump emphasized that the GENIUS Act represents a "massive validation" of the cryptocurrency sector, stating, "This signing is a massive validation of your hard work and pioneering spirit." The law requires that stablecoins be fully backed by liquid assets, such as US dollars and Treasury bills, and mandates that issuers publicly disclose their reserve compositions monthly, thereby reinforcing consumer confidence in these digital assets, according to Al Jazeera and India Times.

The legislation is viewed as a significant step towards making a broader range of financial institutions and consumers comfortable with using stablecoins for transactions. The stablecoin market currently exceeds $260 billion and is projected to expand significantly as regulatory clarity increases, attracting investment from mainstream financial institutions. Industry forecasts suggest this market could reach $2 trillion by 2028, as noted by Standard Chartered and cited in Dawn.

However, the bill has faced criticism for its shortcomings, such as a lack of robust anti-money laundering measures and the absence of provisions to prevent major corporations from issuing their own stablecoins, potentially leading to market concentration and a lack of regulatory oversight. Critics, including some Democratic lawmakers, argue that the act does not sufficiently safeguard against potential conflicts of interest, particularly concerning Trump's personal stakes in the crypto market, specifically World Liberty Financial, which has launched its own stablecoin, USD1, according to ABC News and Channel News Asia.