GENIUS Act Establishes First US Federal Stablecoin Framework

On July 18, 2025, President Donald Trump signed the GENIUS Act into law, establishing the first comprehensive federal framework for regulating U.S. dollar-backed stablecoins. The legislation mandates full backing of stablecoins by U.S. dollars or short-term Treasury bills, requires monthly reserve disclosures, enforces strict anti-money laundering compliance, and grants stablecoin holders senior rights to reserves if issuers fail. This regulatory clarity is hailed by major financial players like Mastercard and JPMorgan Chase as a catalyst for mainstream adoption, fostering innovation and potentially reshaping the digital payments landscape. The GENIUS Act also delineates regulatory oversight between federal and state authorities and excludes stablecoins from securities regulation while subjecting them to anti-money laundering laws. The law is expected to bolster institutional confidence in stablecoins such as USDC and USDT, enabling expanded use cases in cross-border payments, settlements, and digital liquidity management. Industry experts and financial institutions view the act as a pivotal step in positioning the U.S. as a leader in digital assets and supporting the broader integration of stablecoins into the financial system.