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Trump signs first US law on stablecoins, hails it a 'financial revolution'
Named the Genius Act, the new law creates a clear regulatory structure for stablecoins backed by the US dollar. It requires issuers to maintain dollar-for-dollar reserves in short-term government securities or equivalent assets, all under the oversight of either state or federal regulators.
'The Genius Act creates a clear and simple regulatory framework to establish and unleash the immense promise of dollar-backed stablecoins,' Trump said. 'This could be perhaps the greatest revolution in financial technology since the birth of the internet itself.'
Boosting the dollar and supporting innovation
According to senior Treasury officials, the bill will bring much-needed certainty to the digital asset space, Bloomberg reported. They said that it will foster innovation while preserving the US dollar's global dominance. The legislation is also seen as paving the way for wider use of digital dollars in the financial system.
Trump stressed the importance of maintaining the dollar's international role, stating, 'Losing that position would be like losing a world war.' He added, 'With the privacy, flexibility and decentralisation of cash, this revolution has the potential to supercharge American economic growth and empower billions of people to save and transfer in US dollars.'
Crypto week and industry support
The bill's passage represents a shift in Trump's stance toward digital assets. Once skeptical, he has now embraced the industry, even promoting the legislative push as 'Crypto Week".
The law comes after the damaging fallout from the collapse of FTX, led by Sam Bankman-Fried. Supporters of the new measure believe it will provide a stable and credible regulatory environment for the industry.
Passing the bill was not without political hurdles. Conservative lawmakers delayed progress, demanding a clause to block the Federal Reserve from launching a central bank digital currency. After meeting with Trump, they agreed to drop their opposition in return for a separate provision to be included in an upcoming defence bill, Bloomberg reported.
Democrats attempted to insert a ban preventing elected officials and their families from participating in stablecoin ventures. That effort failed, raising concerns due to Trump's family connections with World Liberty Financial — a firm with its own token and stablecoin.
Crypto gains political clout
The new law signals the growing influence of crypto investors in Washington. The industry backed friendly candidates in the 2024 elections through powerful political action committees, with Trump receiving broad support.
Trump also appointed venture capitalist David Sacks as the White House's first AI and crypto czar. Earlier this year, he signed an executive order to create a Strategic Bitcoin Reserve and pushed for crypto-friendly regulators while easing investigations into firms like Coinbase and Robinhood.
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