Trump Signs Historic GENIUS Act: New Cryptocurrency Law Could Reshape Banking and Strengthen US Dollar

The legislation creates rules for a $250 billion market and could change how Americans use digital money.

President Donald Trump signed the GENIUS Act into law on Friday, July 18, 2025, marking the first major federal regulation of cryptocurrency in the United States.

The bill passed the House with strong support from both parties, with 206 Republicans and 102 Democrats voting in favor. After facing some delays earlier in the week from conservative lawmakers, the measure moved forward and now becomes the foundation for regulating stablecoins – digital currencies tied to the US dollar.

What the GENIUS Act Actually Does

The GENIUS Act, which stands for “Guiding and Establishing National Innovation for US Stablecoins,” sets up clear rules for companies that want to create digital dollars. These stablecoins must be backed one-to-one with real US dollars or Treasury bills, meaning every digital dollar needs a real dollar backing it up.

The law creates two paths for regulation. Companies issuing more than $10 billion worth of stablecoins will face federal oversight, while smaller companies can work with state regulators instead. This gives both large banks and smaller fintech companies a way to enter the market.

According to the Senate Banking Committee, the law will take effect 18 months after signing, unless federal agencies publish rules sooner. Foreign stablecoin companies have three years to comply with US rules if they want to serve American customers.

Banks and Big Tech Companies Can Now Issue Digital Dollars

The new law opens doors for traditional banks to create their own digital currencies. Major corporations like Meta, Google, and Home Depot could also issue stablecoins under the federal framework. This represents a major shift from current practice, where banks have been largely shut out of the cryptocurrency market.

Banks already follow many of the rules required by the GENIUS Act, including anti-money laundering requirements and customer protection standards. This puts them ahead of cryptocurrency companies that need to build compliance systems from scratch.

The law also requires stablecoin companies to give customers first priority if the company goes bankrupt, providing more protection than many traditional financial products offer.

Strengthening America’s Financial Position Globally

The GENIUS Act aims to keep the US dollar as the world’s primary currency in the digital age. By requiring stablecoins to be backed by US dollars, the law could increase global demand for American currency and Treasury bonds.

Stablecoin companies have already become major holders of US government debt. According to reports, stablecoin issuers now rank as the 18th largest holders of US Treasuries globally.

The digital currency market has grown rapidly, with stablecoins now processing more payment volume than Visa and Mastercard combined. This growth happens mostly outside traditional US banking systems, but the new law brings this activity under American oversight.

Other countries have moved faster on digital currency rules. Europe’s Markets in Crypto-Assets regulation is already in effect, and Singapore has created stablecoin-friendly rules. The GENIUS Act helps America catch up and compete for this growing market.

Market Impact and Investment Opportunities

The law creates immediate opportunities for different types of businesses. Traditional banks can now offer stablecoin services to customers, while technology companies can build new payment systems using digital dollars.

For investors, the legislation provides clarity that could boost cryptocurrency prices in the short term. The bill’s passage shows government support for digital assets, which often leads to increased investment in the sector.

However, the law also creates challenges. Smaller cryptocurrency companies may struggle with new compliance costs, potentially leading to market consolidation where larger players dominate. Some critics worry this could reduce competition and innovation in the long run.

According to CBS News, Trump earned $57.4 million from his family’s cryptocurrency venture World Liberty Financial in 2024. While the law prevents Congress members from profiting from stablecoins during their service, it doesn’t affect Trump’s existing investments.

What Comes Next

The Treasury Department and Federal Reserve now have 18 months to write detailed rules for how the law works in practice. Banks and technology companies will likely start preparing compliance systems and applying for licenses.

For everyday Americans, the changes may not be immediately visible. But over time, digital dollar payments could become as common as using credit cards or mobile payment apps.