- The GENIUS Act, which regulates stablecoins, has been passed by the US Senate
- It requires stablecoin issuers to peg their tokens 1-to-1 to traditional assets
- It is one of three crypto-related bills being pushed by the Trump administration
The crypto market, specifically stablecoins like Tether, has seen a positive market movement following the passage of the GENIUS Act. This is the latest pro-crypto development from the Trump administration and sets the foundation for stablecoin treatment within the country.
This bill comes at a very relevant time, as crypto assets such as stablecoins are becoming more widely used in America. Take gaming, which has been dominated by fiat currency for centuries. These days, it is more common to see a dedicated online crypto casino that only accepts cryptocurrency for wagers. This is thanks to a myriad of benefits, such as fast transaction speeds and low fees, and this use is only becoming more popular year-on-year.
And with the passage of the GENIUS Act, stablecoin developers can put out more tokens like Tether and USC. The act was approved by the Senate on July 17 and is to be signed by the President on July 18. This is one of three crypto-related bills being pushed by the Trump administration as part of a movement dubbed ‘crypto week’.
Details of the GENIUS act
Amongst other things, it requires all stablecoins to be pegged 1-to-1 to the US dollar or another traditional asset. It is worth noting that tokens like Tether have been accused in the past of not being transparent about their reserves. With this law, stablecoin operators will need to provide evidence of their reserves, and this could help preserve public trust.
The way many within the crypto space see it, this is a long-overdue piece of oversight that will help the industry attain even more mainstream acceptance. At the same time, not everyone is in favour of this law.
Crypto critics believe that it could put investors at risk as some crypto projects might offer banking-adjacent services while not being as heavily sctrutinized.
Crypto criticism
Then there is the scrutiny directed towards Trump himself. He was once a crypto critic, denouncing the asset class as a scam back in 2021. But in the years since, he has changed his tune. He’s released a line of Non-Fungible Tokens ( NFTs), dropped a line of crypto-themed merchandise last year, and launched his own crypto meme coin called TRUMP this year. He also made history by becoming the first US presidential candidate to accept crypto for campaign donations.
But while these efforts have earned him allyship within the crypto world, they have also drawn a lot of criticism. The meme coin, for example, saw a major decline in value, though Trump personally profited millions from it. This has led to speculation that his pro-crypto stance is for personal enrichment and not for the benefit of the American public.
But despite these controversies, the stablecoin space seems on track to benefit. The value of USDT, the biggest stablecoin in the market, has seen its value jump by 0.05% in the last 24 hours. And as more crypto-related bills make their way through the Senate, the benefits will only increase.
