GENIUS Act Impact to Stablecoins and Crypto Market

2025-07-22

President Donald Trump officially signed the Guiding and Establishing National Innovation for U.S. Stablecoins Act, better known as the GENIUS Act, into law on Friday, July 18, 2025.

This genius bill latest update marks the first standalone legislation in U.S. history aimed specifically at stablecoins and sets a new precedent for the broader digital asset market.

The GENIUS Act, which passed the Senate in June and was swiftly approved by the House during what lawmakers dubbed “Crypto Week,” introduces a comprehensive framework for regulating U.S. dollar-pegged stablecoins, establishing who can issue them, how they must be backed, and what protections are in place for consumers.

But the implications of this genius bill news go far beyond legal formalities, it could reshape the entire crypto ecosystem, challenge traditional payment systems, and even bolster the strength of the U.S. dollar on the global stage.

What Is the GENIUS Act?

GENIUS Act Impact - Bitrue

Trump Signed Genius Act Bill | Source: Getty Image

The GENIUS Act aims to ensure that only Permitted Payment Stablecoin Issuers (PPSIs), which include banks, credit unions, OCC-chartered nonbanks, and certified fintechs, are authorized to issue U.S.-backed stablecoins. These issuers must:

1. Fully back tokens with liquid, high-quality assets (such as cash and short-term U.S. Treasurys)

2. Segregate reserves

3. Avoid risky lending practices (rehypothecation)

4. Publish monthly audits of reserves

Importantly, the bill excludes stablecoins from being classified as securities or deposits, moving them outside SEC jurisdiction but within Bank Secrecy Act compliance, especially for anti-money laundering.

GENIUS Bill Impact to Stablecoin Ecosystem

The GENIUS bill’s impact to stablecoin markets is expected to be immediate and transformative:

1. Greater Trust & Stability: Clear guidelines reduce uncertainty and enhance confidence in U.S.-backed stablecoins.

2. Market Expansion: Banks, credit unions, and fintechs can now legally enter the market, introducing more competition beyond the current dominance of USDC and USDT.

3. Mainstream Use: Stablecoins could increasingly be used for cross-border payments, retail checkout, and even corporate treasury functions.

As crypto analyst Nic Puckrin explains, "This act could turn stablecoins from niche crypto tools into mainstream financial infrastructure."

The bill also gives the green light for platforms like Shopify and Amazon to scale up stablecoin-based payment systems, paving the way for lower transaction fees and instant settlement, a key competitive edge over legacy systems like Visa and Mastercard.

GENIUS Act Impact - Bitrue

Source: Investopedia

GENIUS Bill Impact to Crypto Market at Large

While the GENIUS Act specifically targets stablecoins, its impact to the crypto market as a whole is far-reaching:

1. Institutional Confidence: The law could attract major Wall Street players and institutional investors who previously avoided crypto due to regulatory uncertainty.

2. Boost to U.S. Crypto Firms: U.S.-based companies like Coinbase could gain a regulatory first-mover advantage.

3. Treasury Demand: Mandatory T-bill reserves could create a massive new buyer for U.S. government debt, indirectly supporting dollar strength in the global economy.

4. Winners & Losers: While compliant stablecoins will thrive, algorithmic and under-collateralized coins may struggle to meet new requirements.

As President Trump emphasized, “This could be, perhaps, the greatest revolution in financial technology since the birth of the Internet itself.”

The Political and Economic Ramifications

Supporters of the GENIUS Act, like Senator Bill Hagerty, argue that stablecoins will actually strengthen the dollar, rather than threaten it.

With 99% of stablecoins pegged to USD, a strong regulatory framework could help the U.S. maintain monetary dominance, especially as rival nations, like China with its e-CNY, advance their own digital currencies.

However, critics, particularly among Democrats, warn that the act lacks sufficient guardrails to prevent potential corruption, favoritism, or manipulation by stablecoin issuers and government officials.

Still, with bipartisan backing and vocal support from the crypto industry, the GENIUS Act now stands as a central pillar of America’s emerging digital economy.

What This Means for You

Whether you’re a crypto investor, fintech entrepreneur, or casual observer, the GENIUS Act’s passage represents a turning point. Here’s how it could affect you:

1. Faster, cheaper remittances: Sending money abroad could soon cost a fraction of what traditional methods charge.

2. Retail adoption: Expect to see more merchants offering stablecoin payment options, with rewards for using crypto wallets over cards.

3. Greater legitimacy: With a legal framework in place, crypto adoption among banks, consumers, and regulators is set to accelerate.

The future of money is digital, and thanks to the GENIUS Act, it’s arriving faster than ever.

Stay Ahead in the Crypto Market with Bitrue

The GENIUS Act is just the beginning of a larger crypto revolution. With new regulations, technologies, and investment opportunities emerging every week, it’s crucial to stay informed.

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