In a significant move for the cryptocurrency industry, US President Donald Trump has signed the “Genius Act” into law, aiming to establish a regulatory framework for stablecoins. This legislation, passed with bipartisan support (308-122 votes), is seen as a major victory for crypto advocates who have long pushed for such a framework to legitimize digital assets.
Key Highlights of the Genius Act
- Stablecoin Regulation: The act primarily focuses on creating a regulatory system for stablecoins, which are cryptocurrencies designed to maintain a stable value, typically pegged 1:1 to the US dollar.
- Mainstreaming Digital Assets: This regulatory framework is viewed as a milestone that could pave the way for digital assets to become a daily medium for payments and money transfers.
- Consumer Protection: To safeguard consumers, the law mandates that stablecoin issuers prioritize repayment to coin holders in case of bankruptcy.
- Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF): Issuers are also required to comply with certain AML rules and anti-terrorism restrictions.
- Bipartisan Support: The bill received support from nearly half of the Democratic members and a majority of Republicans, indicating a growing consensus on the need for crypto regulation.
President Trump’s Remarks
President Trump stated that this signing is a result of hard work and highlighted that his government would soon announce some major trade agreements. He emphasized that the stablecoin regulatory system is a crucial step towards opening up the country for trade and making digital assets a mainstream payment method.
The Growing Importance of Stablecoins
Stablecoins are increasingly used, especially by crypto traders, to transfer funds between different tokens due to their stable value. The industry anticipates that these will become mainstream for instant payments and remittances.
This new law signifies a major step by the US government towards integrating cryptocurrencies into the traditional financial system, potentially increasing their adoption and legitimacy on a global scale.
