The GENIUS Act, signed into law by President Donald Trump on July 18, 2025, marks the United States' first federal framework dedicated to regulating payment stablecoins. The legislation introduces strict rules on issuance, reserve backing, and transparency, creating a licensing pathway under the Office of the Comptroller of the Currency for both banks and qualified non-banks, while excluding algorithmic or DeFi-native tokens for further study.
Supporters, including industry leaders and regulators, have hailed the law as a historic step. Ian De Bode, chief strategy officer at Ondo Finance, called it "the beginning of a new regulatory era," while SEC Chair Paul Atkins praised it as a "seminal step" for U.S. financial regulation. Treasury Secretary Scott Bessent emphasized its role in maintaining American leadership in digital finance, predicting stablecoins would expand global dollar access and increase demand for U.S. Treasuries. The law has been linked to a recent rally in Bitcoin and altcoins, reflecting renewed market optimism.
However, the act faces sharp criticism. Banking groups, including the American Bankers Association, warned that loopholes could allow stablecoin issuers to indirectly pay yield, potentially diverting up to $6.6 trillion in deposits from traditional banks and raising borrowing costs. Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, accused the administration of overlooking Trump-linked conflicts of interest and urged Treasury to strengthen oversight. In a letter to Secretary Bessent, she highlighted gaps in consumer protections, risks of illicit use by rogue actors, and the potential for corporations to control the money supply, calling for swift action to close regulatory vulnerabilities.
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