The US just passed its first-ever national crypto law — and it could change everything about digital money.
In a historic move marking a turning point for digital currencies, the United States Congress has passed its first major national cryptocurrency legislation known as the Genius Act. The bill, which establishes a comprehensive regulatory framework for stablecoins, is expected to be signed into law by President Donald Trump this Friday following overwhelming support from both chambers of Congress.
A Milestone for Crypto Regulation
The passage of the Genius Act is a major milestone for an industry that once existed largely on the fringes of the financial system. The cryptocurrency sector has lobbied intensively for clearer rules over the past several years, and invested millions during the 2024 election cycle backing candidates—including Donald Trump—who showed support for crypto innovation.
According to Reuters, the House approved the bill with a vote of 308 to 122, following the Senate’s passage last month, paving the way for Trump to enact the legislation swiftly. The bill sets forth a regulatory regime specifically targeting stablecoins, a type of cryptocurrency pegged one-to-one to stable assets such as the US dollar or other low-risk securities.
What the Genius Act Means for Stablecoins
Stablecoins serve as an essential bridge within the cryptocurrency ecosystem, allowing traders and users to move funds between various tokens while avoiding the volatility seen in Bitcoin or Ethereum. The Genius Act requires these coins to be fully backed by reserves—either US dollars or equivalent assets—which supporters argue will bring much-needed transparency and trust to the market.
As Barron’s highlights, industry leaders from companies like Circle and Coinbase have praised the bill, saying it provides clear guardrails that could encourage broader adoption of digital currencies among mainstream investors and consumers.
Yet, critics warn the bill may open the door to new financial risks. Consumer advocacy groups cautioned that it could deepen the participation of technology firms in banking-like activities without subjecting them to equivalent oversight. They also warned about complex bankruptcy processes that could leave customers vulnerable if a stablecoin issuer fails.
The Genius Act ushers in new federal regulation for cryptocurrencies like Bitcoin in the United States.
Political and Industry Context
The political landscape around cryptocurrency regulation has been fraught. While Trump initially called crypto a “scam,” his stance evolved as he received backing from the sector and cultivated business ties with firms such as World Liberty Financial. The Genius Act is just one of three crypto-related bills gaining traction in Washington, all of which have Trump’s support, according to the Associated Press.
Moreover, the bill drew bipartisan support—around half of House Democrats and most Republicans voted in favor despite some opposition framed around concerns about Trump’s personal business interests and his family’s promotion of their own crypto ventures.
Al Jazeera notes that the legislation is viewed by industry advocates as essential for maintaining US leadership in cryptocurrency innovation, particularly as other countries accelerate their efforts to regulate and integrate digital assets into their financial systems.
Broader Crypto Legislation and Industry Outlook
Alongside the Genius Act, two other significant bills have passed the House and now await Senate consideration. These include measures to prevent the US central bank from issuing a digital dollar and to establish regulatory frameworks for other forms of cryptocurrencies.
MarketWatch describes this legislative package as “crypto week” in Washington, reflecting growing congressional urgency to clarify the sector’s rules amid rapid innovation and market growth.
Industry analysts like Terry Haines of Pangaea Policy have tempered expectations, however, predicting that the Genius Act may be the last major crypto legislative victory for some time. “When the easy part—stablecoins—takes 4 to 5 years and barely survives scandals, it’s not much to crow about,” Haines wrote, underscoring the complex challenges ahead for broader crypto regulation.
The Road Ahead: Trump’s Crypto Policy and Market Reaction
Reports indicate that Trump is preparing an executive order that would allow retirement accounts to invest in private assets, including cryptocurrencies, gold, and private equity—potentially signaling a further embrace of digital finance innovation in his administration.
The markets have responded enthusiastically. Bitcoin recently surged past $120,000, hitting record highs, reflecting optimism spurred by the new regulatory clarity, according to Reuters and Barron’s.
Frequently Asked Questions (Crypto Regulation FAQ)
What is the Genius Act?
The Genius Act is the first major federal law regulating stablecoins, requiring them to be backed one-for-one with US dollars or similar low-risk assets.
Why is this legislation important?
It provides clear rules for stablecoins, which are essential for crypto trading and mainstream adoption, potentially boosting investor confidence.
Are there risks associated with the Genius Act?
Critics warn it could increase systemic risks by legitimizing stablecoins without robust consumer protections and allowing tech firms to operate with less banking oversight.
What other crypto bills are moving through Congress?
Two companion bills address digital dollar issuance and broader crypto regulation but face a more uncertain path through the Senate.
Final Thoughts
The Genius Act represents a significant step forward for US cryptocurrency regulation, balancing innovation with oversight in an industry long characterized by uncertainty. As the bill moves toward becoming law, the US positions itself to maintain leadership in a rapidly evolving financial frontier—though challenges and debates over the future role of crypto remain far from settled.
