WASHINGTON – President Trump formalized new rules concerning digital currencies on Friday, marking a significant step forward for the burgeoning sector that has invested heavily in gaining credibility and political influence.
The GENIUS Act establishes initial guidelines and safeguards for consumers regarding stablecoins. These digital assets are designed to maintain a steady value by being linked to assets like the U.S. dollar, aiming to minimize the price swings seen in other cryptocurrencies. The bill received widespread support from both Democrats and Republicans in both the House and Senate.
The newly enacted law aims to foster greater trust among consumers in the digital currency market, which has rapidly evolved into a major force in Washington through substantial campaign contributions and lobbying efforts. Its approval follows Trump’s repeated pledges to position the United States as the global hub for digital currency innovation.
“For years, you faced ridicule and dismissal, and were written off,” Trump stated to cryptocurrency industry leaders at a White House signing event attended by approximately 200 individuals, including several leading Republican legislators. “This signing serves as a powerful endorsement of your dedication and pioneering spirit.”
AP AUDIO: Trump signs new stablecoin regulations into law, a major milestone for crypto industry
AP Washington correspondent Sagar Meghani reports on President Trump signing a major crypto industry bill.
Representatives of the cryptocurrency industry have long maintained that the previous Biden administration unfairly targeted them, and they allocated substantial resources to supporting Trump’s successful election campaign last year.
During his Friday address, the President expressed considerable admiration for figures in the digital currency space, stating, “No one has garnered such respect in such a brief period.”
Trump emphasized that supporting the cryptocurrency sector is “beneficial for the dollar and for the nation.”
“That’s the reason I backed you from the outset,” Trump stated, despite his previous skepticism towards digital currencies. His administration has already implemented several measures to encourage growth in the crypto space, including the Securities and Exchange Commission ceasing several enforcement proceedings against major crypto businesses.
President Trump also humorously admitted to the political motivations behind his support for the crypto industry: “And I also did it for the votes,” which garnered laughter from those in attendance.
The President also joked that the GENIUS Act was named in his honor. The acronym means “Guiding and Establishing National Innovation for U.S. Stablecoins.”
In recent years, stablecoins have become significantly more widely used. Circle, a US-based company that issues a widely used cryptocurrency, listed on the New York Stock Exchange earlier in the year. The company experienced rapid growth in value, spurred by enthusiasm from crypto fans and investors. Stablecoin operators generate revenue through the interest earned on the reserves backing the coin.
The GENIUS Act prohibits members of Congress and their families from profiting from stablecoins. However, this rule doesn’t extend to the president and his family, even as Trump cultivates a digital currency based commercial network originating from the White House. Trump’s family has notable financial stakes in World Liberty Financial, a project in the digital currency space, which launched its own stablecoin this year and received an early capital influx from a fund in the United Arab Emirates.
The House also passed two more laws on Thursday that are designed to assist the cryptocurrency market. One establishes a new market infrastructure for digital currencies, and the other prevents the Federal Reserve from creating a digital currency. These proposals are now being sent to the Senate.