GENIUS Act becomes law, creating the first US federal framework for stablecoins

President Trump has signed the GENIUS Act into law, establishing the first federal regulatory framework for payment stablecoins in the United States. The House of Representatives passed the bill this week, after the Senate approved it in June.

The law sets out who can issue stablecoins and under what conditions. Its main features include:

• Reserves backed one-to-one by cash, bank deposits, short-term Treasury bills and similar liquid assets
• Regular public disclosure of reserve composition
• Licensing through federal regulators or qualifying state regimes, depending on issuer size
• Priority for stablecoin holders in the event of an issuer's insolvency

Supporters argue the law provides legal clarity that will encourage innovation and strengthen the role of the dollar in digital payments. Stablecoin issuers are already significant buyers of US Treasury bills, and the law could increase that demand.

Critics, including several Democratic lawmakers, have raised concerns about consumer protection, the involvement of large technology companies and potential conflicts of interest linked to crypto ventures associated with the president's family.

The law does not take effect immediately. Regulators must now write detailed rules, a process expected to take many months. Attention now turns to broader market structure legislation for crypto, which is still being discussed in Congress.