US Congress passes Genius Act to regulate stable coins amid Trump ties and market surge

The United States has passed its first major federal legislation regulating cryptocurrency, marking a historic milestone for the fast-growing digital finance sector. Dubbed the Genius Act, the bill focuses primarily on stablecoins, a class of cryptocurrencies tied to traditional low-risk assets like the US dollar, and is designed to inject clarity into a long-murky space.

But even as backers celebrate the move as a long-overdue step toward financial modernization, critics are warning of serious risks to the banking system, and sounding alarms about the outsized role of Donald Trump’s crypto ties in the bill's trajectory.

The House of Representatives approved the legislation on Thursday(July 17) in a rare show of bipartisan support, following Senate passage last month. President Trump is expected to sign the measure into law on Friday.


“The legislation lays the foundation for digital finance in the US, but we should be clear, this is just the tip of the iceberg,” said Sheila Warren, CEO of the Crypto Council for Innovation.

Trump took a U-turn

The legislation caps years of lobbying by crypto firms, who poured millions into 2024’s election cycle, backing candidates sympathetic to industry priorities, chief among them Trump, who once called Bitcoin a “scam” but has since embraced the sector both politically and financially. Trump also maintains ties to World Liberty Financial, a firm now under scrutiny for aggressive marketing of blockchain-based products.

What does this mean?

Under the Genius Act, stablecoin issuers will be required to maintain full reserves in US dollars or similarly secure assets, effectively outlawing the issuance of algorithmic or under-collateralized stablecoins. The bill also delegates supervisory powers to federal regulators like the Comptroller of the Currency and state financial authorities, though critics say oversight mechanisms remain vague.

Proponents say the measure is vital for keeping the US competitive in the global digital economy, especially as countries like the UK, Singapore, and Japan move ahead with structured crypto rules.

“It’s regulatory clarity. That alone could unlock innovation we’ve been sitting on for years,” said Republican Rep. Patrick McHenry, a longtime crypto advocate.

What do the critics say

But opponents argue that the bill not only fails to include meaningful consumer protections, it also risks blurring the line between tech firms and traditional banks, without imposing the same regulatory rigor.

“This bill effectively lets Big Tech act like banks, but without the rules banks follow,” said Dennis Kelleher, CEO of Better Markets, a nonprofit promoting financial reform.

A coalition of consumer groups, including the National Consumer Law Center, warned Congress earlier this year that the bill would “normalize a class of risky assets” and leave consumers vulnerable if stablecoin issuers collapse, as happened with TerraUSD in 2022, which triggered billions in losses globally.

There are also ethical concerns surrounding Trump’s business interests. While White House aides deny that the president stands to benefit financially, watchdogs remain skeptical.

“Voting for this bill isn’t just a policy decision, it’s a green light for Trump’s monetization of public office,” said Sarah Bloom Raskin, former Treasury official under Obama.

Two more crypto bills are in limbo

The Genius Act is the first of three major crypto-related bills advancing through Washington this summer. The other two, one blocking the Federal Reserve from launching a central bank digital currency (CBDC) and another establishing wider oversight for crypto tokens and exchanges, have cleared the House but now face an uncertain path in the Senate.