In July 2025, President Donald Trump signed the GENIUS Act, which became the first federal regulation for the issuance and use of stablecoins within the U.S. banking system.
Introduction of the GENIUS Act
The GENIUS Act was signed into law by President Donald Trump in July 2025. It lays down the foundation for the formal recognition and regulation of stablecoins within the U.S. banking and payment systems. Key participants in this process include President Trump, Senator Bill Hagerty, and federal regulatory bodies like the OCC and the Federal Reserve.
Impact on the Market and Financial Stability
The Act institutes strict reserve and reporting requirements for stablecoin issuers. It is anticipated that this will increase demand for U.S. Treasury securities and impact liquidity in the financial markets. While initial feedback from market participants remains subdued, the Federal Reserve has indicated that the Act could contribute to stabilizing the payment system.
Growth Prospects and Industry Expectations
Many experts anticipate that the stablecoin market may grow to $4 trillion by 2035, driven by greater regulatory clarity and increased institutional interest. Research from JP Morgan and Standard Chartered suggests strong growth influenced by regulatory oversight and reserve fund movements.
The enactment of the GENIUS Act marks a significant step toward the regulation of stablecoins in the U.S., providing clarity for market participants and increasing trust in stablecoins within the financial system.
