The US Congress has secured a decisive victory for the crypto industry by passing the first federal law to regulate stablecoins ("GENIUS Act"). The law is expected to come into force as early as next week.
The bill, backed by Republicans and supported by President Donald Trump, provides for federal or state oversight of dollar-based tokens ("stablecoins"). It includes provisions for 1:1 backing, monthly reserve reports, and priority reimbursement for investors in the event of insolvency. Following its passage in the Senate, the GENIUS Act cleared the House of Representatives with broad bipartisan support by a vote of 308 to 122. According to reports, Trump personally lobbied Republican lawmakers to support the measure. The bill, which stands for "Guiding and Establishing National Innovation for U.S. Stablecoins," now goes to the President for signing.
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Stablecoin adoption in the national interest of the United States
Stablecoins are digital assets pegged to traditional currencies like the US dollar. In the United States, this sector holds significant strategic importance. Stablecoins are backed by US Treasury bonds – ensuring consistent demand for US debt. For example, market leader Tether holds over $120 billion in US Treasuries, more than the Federal Republic of Germany. Accordingly, US lawmakers are pushing for strict regulation of these digital dollars.
The GENIUS Act provides the legal framework for established players to enter the space. Since the legislation was drafted, several US banks – including JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo – have held talks about developing a joint stablecoin. In addition, FinTech giant Fiserv announced plans to launch its own stablecoin, called FIUSD, by the end of the year and integrate it into its existing network of around 10,000 financial institutions and 6 million merchants.
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Successful conclusion of "Crypto Week"
The stablecoin bill is the centerpiece of a legislative initiative that Trump has dubbed "Crypto Week." In addition to the GENIUS Act, the US Senate passed two other crypto-related bills. A crypto market structure law aims to clarify which regulatory agencies will be responsible for the various aspects of cryptocurrencies. Another bill seeks to ban the federal introduction of a digital version of the dollar (Central Bank Digital Currency, CBDC). These two still need to be approved by the Senate.
Banks are taking these developments seriously. In this week's earnings announcements, Jamie Dimon of JPMorgan, Brian Moynihan of Bank of America, and Jane Fraser of Citigroup described the emerging "digital dollar" as a potential threat to the banking sector's dominance in payments. All three signaled that their institutions would respond accordingly.
