President Donald Trump signed the bipartisan GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins) into law on July 21, 2025, establishing the first comprehensive U.S. regulatory framework for stablecoins. The legislation passed the House 308-122 and Senate with over 100 Democratic votes, requiring stablecoins to be fully backed by liquid assets like U.S. dollars or Treasury bills and mandating monthly reserve disclosures. A key "Libra clause" prevents Big Tech dominance by forcing non-bank issuers to operate as standalone entities approved by a Treasury-led committee, while banks must use legally separate subsidiaries barred from lending or risky investments.
The Act's ban on interest-bearing stablecoins has redirected investor capital toward Ethereum's DeFi ecosystem, driving ETH to a 2025 peak of $3,816.70 on July 20. Crypto stocks surged immediately post-signing: Circle (issuer of USDC) rose 1.9%, Coinbase gained 2%, and mining firms like BitDigital and BTCS jumped up to 9.4%. The broader market capitalization hit $4 trillion on July 18, with Solana reaching its highest price since February and the ProShares Ultra Solana ETF soaring 16.2%.
Treasury Secretary Scott Bessent and Ripple CEO Brad Garlinghouse project the $250 billion stablecoin market could grow to $2 trillion under the new rules. Major retailers like Amazon and Walmart are exploring stablecoin payments, which analysts say could reduce transaction costs by 90%. However, Democrats criticized lax anti-money laundering provisions and potential conflicts of interest benefiting Trump-linked crypto ventures.