Photo by D'Vaughn Bell
In a landmark moment for the cryptocurrency industry, US lawmakers have passed the nation’s first major piece of federal cryptocurrency legislation. The move marks a turning point for the once-marginal sector, which has spent years lobbying Congress and invested millions in last year’s elections, supporting candidates including former President Donald Trump.
The legislation establishes a regulatory framework for stablecoins—a form of cryptocurrency backed by reliable assets such as the US dollar. The bill, named the Genius Act, was approved by the House of Representatives on Thursday, following Senate approval last month. Trump is expected to sign it into law on Friday. The Genius Act is one of three crypto-related bills currently making their way through Washington with Trump’s endorsement.
Though Trump previously dismissed cryptocurrency as fraudulent, his stance evolved after gaining industry support and becoming involved in the crypto space as a businessman. He now has links to firms like World Liberty Financial.
Supporters say the new law provides much-needed regulatory clarity to a rapidly growing industry, helping the US keep pace with advancements in digital payment systems. The crypto sector has long advocated for such legal frameworks, hoping they would foster broader adoption and push digital currencies further into the financial mainstream.
Key provisions of the law include a requirement that stablecoins be fully backed by US dollars or similarly low-risk assets on a one-to-one basis. These coins, which are less volatile than cryptocurrencies like Bitcoin, are frequently used by traders to transfer funds between different digital tokens.
Stablecoin usage has surged in recent years. However, critics argue that the legislation may introduce new vulnerabilities into the financial system. They warn that by giving legitimacy to stablecoins, the bill could expose consumers to risk, particularly if the oversight mechanisms are insufficient.
Some critics expressed concern that the law would increase the involvement of tech companies in bank-like activities without imposing comparable regulatory scrutiny. They also pointed out the potential for consumer confusion or financial harm if a stablecoin provider were to go bankrupt, given the bill’s lack of clarity on consumer protections in such events.
Opponents of the legislation also tried to build resistance by arguing that voting in favor effectively endorsed Trump’s personal business ventures, including his family’s promotion of their own cryptocurrencies.
Despite these objections, the bill garnered considerable bipartisan support. Approximately half of Democratic lawmakers joined most Republicans in voting for the measure.
“A number of lawmakers may feel that passing this bill—even with its flaws—is preferable to maintaining the current regulatory void. But that’s a fundamental misjudgment of the risks these instruments pose,” a coalition of consumer and advocacy organizations wrote in a letter to Congress earlier this year. They warned the legislation could fuel the growth of financial products that many consumers might mistakenly view as inherently safe.
While Congress had initially aimed to pass all three crypto bills earlier in the week, procedural delays slowed progress. The remaining two bills, which have already cleared the House, now await consideration in the Senate, where Republicans hold a slim majority. These proposals would prevent the Federal Reserve from launching a central bank digital currency (CBDC) and introduce a regulatory system for other digital assets.
The legislative action comes as Trump is reportedly drafting a presidential order that could open retirement accounts to private investments, including cryptocurrencies, gold, and private equity.
Meanwhile, Bitcoin surged to a new all-time high this week, crossing the $120,000 (£89,000) threshold.
Despite this momentum, some analysts believe the Genius Act may be the crypto industry’s only near-term legislative success. Terry Haines, a political analyst with Washington-based Pangaea Policy, suggested that the other two bills—seen as more consequential—are unlikely to advance further.
“This is likely crypto’s last major legislative victory for a while,” Haines said. “When even the simplest piece—stablecoins—takes four to five years to pass and barely makes it through amid industry scandals, it’s hardly a resounding triumph.”
