The GENIUS Act creates a regulatory framework for US-dollar-backed stablecoins, legitimizing their use for payments and financial transfers. It was passed by Congress with bipartisan support. Trump endorsed the legislation, emphasizing its benefits for the economy and indicating the crypto industry's strong influence on politics through substantial donations. Stablecoins aim to maintain a constant value against the dollar, backed by liquid assets, and the market is projected to grow significantly in the coming years. Critics have called for stronger anti-money laundering measures as part of the law's provisions.
"This groundbreaking technology will buttress the dollar's status as the global reserve currency, expand access to the dollar economy for billions across the globe, and lead to a surge in demand for US Treasuries, which back stablecoins," Treasury Secretary Scott Bessent said in a statement.
The GENIUS Act requires stablecoins to be backed by liquid assets, ensuring they maintain a constant value, typically pegged at a 1:1 ratio to the US dollar.
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