The US House of Representatives on Thursday voted overwhelming to pass the country’s first significant cryptocurrency regulation, the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. It will now go to President Donald Trump for final approval.
If enacted, the bill will establish rules for issuers of stablecoins, a type of coin pegged to a $1 valuation, which proponents have pitched as a faster and cheaper way to make payments. The bill requires issuers to collateralize stablecoins with low-risk assets on a one-to-one basis, provide accounts to a state or federal regulator, and maintain anti-money laundering controls.
In June, US Treasury Secretary Scott Bessent said he believes that the stablecoin economy could reasonably exceed $2 trillion—up from $195 billion today—off the back of the GENIUS Act.
On the campaign trail last year, Trump pledged to turn the US into the “crypto capital of the planet.” After the GENIUS Act cleared the Senate in June, the president called for the House to deliver the bill to his desk “ASAP,” with no further modifications or additions. He has now gotten his wish.
David Sacks, a venture capitalist serving as the so-called White House AI and Crypto Czar, celebrated the bill’s passage in a social media post. “Massive wins for crypto in the House,” Sacks wrote.
The crypto industry has widely heralded the bill as an historic step that will better protect stablecoin holders from fraud and reckless mismanagement, and help to prevent them from being abused by criminal actors. “Gone are the days where you could be a stable-in-name-only-coin and freely enter the US market,” says Dante Disparte, chief strategy officer at Circle Internet Group, issuer of the USDC stablecoin.
But critics see the GENIUS Act as a light-touch concession to an industry that spent hundreds of millions of dollars influencing the outcome of congressional races in 2024. “New laws are needed to establish crypto guardrails and safeguards, but this one is ineffectual or worse,” said Democrat senator Richard Blumenthal after the bill passed in the Senate.
Opponents claim the bill does not go far enough in eliminating loopholes, guarding against fraud by stablecoin issuers, or addressing potential conflicts of interest arising from the Trump family’s crypto endeavors.
The stablecoin business model is relatively simple: Customers exchange US dollars for coins that can be used for payments or to trade freely for other cryptocurrencies. The stablecoin issuers keep some of those dollars in cash and cash-equivalents, and invest the rest into yield-bearing assets like government bonds—and pocket the interest.
A stablecoin holds a steady valuation by way of the understanding that, if ever somebody wants to redeem a coin for the dollar it represents, the issuer can dip into its reserve and pay them.
In the last couple of years, a handful of other companies, including PayPal, Ripple, and World Liberty Financial (which is affiliated with the Trump family) have joined industry stalwarts Tether and Circle in issuing stablecoins. But experts predict the passage of the GENIUS Act will lead to an explosion in the number of dollar-denominated stablecoins.