In a historic move for the cryptocurrency sector, U.S. lawmakers have passed the country’s first comprehensive federal legislation focused on digital assets.
The new law, seen as a milestone for an industry long operating on the regulatory fringes, aims to bring structure to the use of stablecoins—cryptocurrencies backed by traditional assets like the U.S. dollar.
The bill, dubbed the Genius Act, establishes a regulatory framework specifically for stablecoins. These digital tokens, designed to maintain a stable value, are commonly used to facilitate trading within the crypto ecosystem. The legislation mandates that such tokens be backed one-to-one with dollars or other low-risk assets, reinforcing their role as a bridge between traditional finance and digital markets.
The U.S. House of Representatives approved the bill on Thursday, following earlier passage by the Senate. Former President Donald Trump, now a vocal supporter of cryptocurrency initiatives, is expected to sign it into law on Friday. The legislation is one of three crypto-related bills advancing with Trump’s endorsement.
Trump’s stance on digital currencies has evolved significantly. Once skeptical—labeling crypto a scam—he has since embraced the sector, both politically and commercially. He has supported crypto-linked firms such as World Liberty Financial and has gained substantial backing from the industry, which contributed heavily to campaigns during the last election cycle.
Proponents of the Genius Act say it brings much-needed clarity to a sector that has grown rapidly but lacked regulatory guardrails. They argue that such oversight will help the U.S. remain competitive in financial innovation and encourage broader adoption of digital currencies in mainstream transactions.
However, critics caution that the bill could introduce new systemic risks. Consumer advocacy groups have raised concerns about legitimizing stablecoins without requiring robust consumer protections or subjecting tech companies to banking-level scrutiny. Some fear that in cases of insolvency, consumers may find themselves entangled in complex legal battles with little recourse.
These opponents also argued the legislation could be seen as indirectly endorsing Trump’s business ties to crypto ventures. Nevertheless, the bill received bipartisan support, with roughly half of Democratic lawmakers joining Republicans in voting for its passage.
“This bill might look like progress, but it opens the door to consumer confusion and regulatory loopholes,” warned a coalition of advocacy organizations in a letter to Congress earlier this year. They emphasized that many consumers might falsely assume that stablecoins are as safe as traditional bank deposits.
The Genius Act is part of a broader legislative push in Washington aimed at defining the federal government’s role in overseeing digital assets. The two remaining bills, which already cleared the House, propose to prohibit the Federal Reserve from launching a central bank digital currency and to regulate other types of cryptocurrency beyond stablecoins. These are now headed to the Senate, where Republicans hold a slim majority.
Meanwhile, reports suggest that Trump is preparing an executive order that could expand retirement investment options to include assets like cryptocurrency, gold, and private equity—further evidence of crypto’s growing political traction.
As Bitcoin surged to a new all-time high of over $120,000 this week, the momentum in Washington reflects the sector’s increasing influence. But not all analysts are optimistic about future progress.
Terry Haines of Pangaea Policy noted that while the Genius Act marks a win, it may be the last for some time.
“This is likely the peak for crypto legislation for now,” Haines wrote. “When it takes nearly five years to pass the simplest part—and that’s withstanding multiple industry scandals—it’s hard to call it a major victory.”
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