U.S. Congress Passes Landmark Stablecoin Bill, the GENIUS Act

In a groundbreaking move for the cryptocurrency industry, the U.S. Congress passed its first-ever federal legislation regulating stablecoins, the GENIUS Act, on October 17. Described by Bloomberg as a “historic victory for the crypto sector,” the bill now awaits the signature of former President Donald Trump to become the law of the land.

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Enhanced Oversight for USD-Pegged Stablecoins

The GENIUS Act introduces a robust regulatory framework requiring stablecoins pegged to the U.S. dollar to adhere to federal or state-level supervisory oversight. The legislation cleared the House of Representatives with a decisive 308 to 122 vote after passing in the Senate. Notably, Donald Trump played a critical role in unifying Republican lawmakers to ensure the bill’s passage.

The crypto market reacted positively, viewing the legislation as a stepping stone to innovations in remittance solutions, payment systems, and enhanced financial inclusion. Market experts forecast explosive growth, projecting the stablecoin market—currently valued at $265 billion—to soar to $3.7 trillion by 2030. This points to accelerating adoption and the increasing integration of stablecoins into global financial systems.

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“Crypto Week” Ushers in Sweeping Crypto Legislation

The GENIUS Act serves as the centerpiece of Trump’s broader “Crypto Week” initiative, aimed at normalizing cryptocurrency markets within U.S. legislative frameworks. Alongside the stablecoin bill, the House also approved a sweeping legislative package addressing cryptocurrency market structure; however, this broader legislation still requires Senate approval.

Despite the milestone, concerns over gaps in consumer protections have surfaced. Democratic leaders like Senator Elizabeth Warren and Representative Maxine Waters raised red flags, warning that in cases of stablecoin issuers' bankruptcy, the government may be forced into taxpayer-funded bailout scenarios. These critiques shine a light on the need for additional regulatory refinement as the crypto space evolves.

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Banks Gear Up for Competition with the Digital Dollar

The passing of the GENIUS Act has prompted U.S. financial giants like JP Morgan, Bank of America, and Citigroup to respond strategically. These institutions have expressed concerns about the impact of a digital dollar on their dominance in the payments ecosystem. In turn, many are accelerating investments in private stablecoins and advanced payment technologies to secure their competitive positions.

A few institutions have already begun exploring the issuance of proprietary stablecoins, signaling their intention to remain key players in an increasingly digital financial landscape.

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Winners Emerge: Circle and Coinbase Surge Amid Optimism

Stablecoin issuer Circle has emerged as one of the immediate beneficiaries of the legislation. The announcement of the GENIUS Act led to a 25% surge in Circle’s stock price this week. Similarly, crypto exchange giant Coinbase, which boasts a strategic partnership with Circle, experienced a record high in its stock valuation.

Meanwhile, market leader Bitcoin (BTC) joined the rally, breaching its all-time high of $123,000 on October 14 before experiencing minor price corrections. A key clause in the new legislation requires stablecoin issuers to ensure 1:1 liquidity backing with safe assets, such as short-term Treasury securities, under strict regulatory supervision.

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A Boon for Institutional Confidence in Cryptocurrency

Economists and industry stakeholders have lauded the legislation’s impact, with Eswar Prasad, a senior researcher at the Brookings Institution, labeling it a “turning point for institutional trust in crypto.” By embedding stablecoin issuance within a legally defined and well-supervised structure, the GENIUS Act paves the way for the formal integration of crypto into the traditional financial ecosystem.

Prasad further highlighted that the regulations could lead to widespread market validation, enabling deeper institutional participation and bridging the gap between the crypto world and mainstream finance.

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Trump Family Ties Stir Controversy

Amid the celebrations, allegations have surfaced connecting Donald Trump and his family to undisclosed financial interests in stablecoin-related entities. Although Democrats pushed for clauses addressing potential conflicts of interest, these amendments failed to garner Republican support and were removed from the final version of the bill.

Critics argue that the lack of transparency creates questions about the former president’s motivations. However, proponents of the legislation maintain that the focus should remain on the transformative potential of the GENIUS Act in legitimizing cryptocurrencies.

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A New Era for Stablecoins and Digital Assets

The passage of the GENIUS Act marks a monumental shift for the global financial industry, offering a pathway for mainstream adoption and institutional trust in stablecoins and digital assets. While challenges remain—particularly around consumer protections and addressing systemic concerns—the legislation is a definitive step in establishing stablecoins as a cornerstone of the modern financial framework.

As the crypto sector celebrates this victory, industry experts caution that this is only the beginning of a long regulatory journey to solidify the future of digital assets.