Trump Signs GENIUS Act Mandating Stablecoin Backing Rules

On July 18, 2025, President Trump signed the GENIUS Act into law at the White House, establishing federal regulations for stablecoins in the United States.

The act mandates that all stablecoins in the U.S. be fully backed by U.S. dollars or similar liquid assets, impacting issuers’ compliance costs.

GENIUS Act Demands Dollar Backing for All Stablecoins

The GENIUS Act, supported by a bipartisan coalition, now requires stablecoin issuers like USDT and USDC to maintain full U.S. dollar backing. This measure aims to bolster market confidence and transparency, instituting annual audits for issuers with market caps over $50 billion.

Compliance demands may increase operational costs for issuers, necessitating adjustments across the sector. Stablecoin issuers must now ensure auditable and liquid backing or risk losing access to U.S. financial markets.

Market observers anticipate shifts in token allocations, emphasizing a re-evaluation of on-chain strategies to adopt newly compliant practices. Eleanor Terrett of ChainCatcher noted anticipated crypto market responses, stating the legislation’s transformative effect on digital asset regulation.

Historical Context Reveals Compliance Costs in DeFi Landscape

Did you know? The GENIUS Act marks the first federal regulation targeting stablecoins in the U.S., creating a legal framework comparable to New York’s historic BitLicense requirements.

CoinMarketCap reports Tether USDt (USDT) remains stable at $1.00 with a market cap of $161 billion and a 24-hour trading volume increase of 18.86%. Historical price changes remain minimal, demonstrating market adaptation amidst regulatory shifts.

Coincu analysts suggest the GENIUS Act will lead to widespread reassessment of DeFi protocols reliant on stablecoin liquidity. Historical precedent implies a potential reshuffling of investment strategies, fostering innovation under new regulatory parameters.