U.S. President Donald Trump has signed the GENIUS Act, establishing mandatory reserve backing for stablecoin issuers and potentially altering the landscape of financial technology.
Signing of the Law and Its Significance
At a White House ceremony, President Trump signed the GENIUS Act, which establishes a clear framework for stablecoin regulation. Trump remarked, "This could be perhaps the greatest revolution in financial technology since the birth of the Internet itself."
Implications for the Industry and Financial Sector
Under the new law, stablecoin issuers are required to maintain mandatory reserve backing with monthly public disclosures of liquid assets. Banks and credit unions are now allowed to issue dollar-backed stablecoins, likely boosting the U.S. stablecoin market above $250 billion. Industry leaders and financial executives expressed optimism and support for the legislation, anticipating business expansion due to stablecoin growth.
Comparison with European Regulatory Model
The regulatory approach of the GENIUS Act closely mirrors harmonized rules in European markets, likely resulting in similar outcomes such as increased institutional adoption and stablecoin activity. Experts suggest that trends from jurisdictions with similar legislative shifts may herald renewed investment growth and regulatory cooperation.
The GENIUS Act represents a significant advance towards structuring the U.S. stablecoin market and could lay the groundwork for future developments in financial technologies.
