President Trump signed the GENIUS Act into law on Friday, enacting the first major cryptocurrency legislation.
The bill, which sets up a regulatory framework for payment stablecoins, reached Trump’s desk after a tumultuous week in the House, in which competing GOP factions revolted over a trio of crypto bills.
The chaos brought the House floor to a standstill and resulted in the longest vote on record in the chamber. Republican leaders struck a deal late Wednesday night to move forward with consideration of the bills, unfreezing the floor and allowing votes to proceed on Thursday.
The House ultimately voted 308-122 to pass the GENIUS Act, with 102 Democrats joining most Republicans to support the legislation.
Here’s are five things to know about the newly minted stablecoin law:
‘Seal of approval’ for crypto industry
The signing of the GENIUS Act marks a key milestone for the industry, as the “first step of the U.S. government really regulating cryptocurrency,” said Rob Nolan, a partner at Duane Morris and a member of the law firm’s digital assets and blockchain group.
As the first major digital assets bill to clear Congress and receive the president’s signature, it imbues the industry with new legitimacy.
“It’s a big deal because when you have a law … it essentially gives a Good Housekeeping seal of approval to the industry,” Ian Katz, managing partner at Capital Alpha, told The Hill. “You now have Congress and the president of the United States signing off on the legitimacy of this industry.
“You can interpret the legislation as encouraging the activity,” Katz said. “To a lot of people, this is the sort of thing you need to really get an industry to take off.”
The passage of the bill marks a sharp reversal of the industry’s fortunes in Washington, which just last year still looked somewhat bleak.
The industry had struggled to regain its footing after the shocking collapse of crypto exchange FTX in 2022 and the subsequent fraud charges filed against its founder, Sam Bankman-Fried. He was later found guilty and sentenced to 25 years in prison.
Under the Biden administration, the industry also contended with former Securities and Exchange Commission (SEC) Chair Gary Gensler, who brought numerous enforcement actions against crypto firms. They accused Gensler of attempting to regulate via enforcement, rather than providing clear rules.
By contrast, Trump has embraced the industry in his second term, naming David Sacks as artificial intelligence (AI) and crypto czar, inviting crypto leaders to the White House and signing an executive order to create a strategic bitcoin reserve and digital asset stockpile.
Broader crypto framework still in the works
While the industry secured a key victory with the GENIUS Act, it represents just one part of the regulatory puzzle for digital assets.
“This is just the first little bite at the apple because it really is a small portion of cryptocurrency assets,” Nolan added.
Stablecoins are just one type of cryptocurrency. They are tied to another asset, like the U.S. dollar, to maintain a more stable price.
Congress has yet to pass legislation creating a broader crypto framework. The key issue at hand is how to split up oversight between the SEC and the Commodity Futures Trading Commission.
The House last week passed its version of crypto market structure legislation, known as the Digital Asset Market Clarity Act. The Senate, which has moved at a slower pace, is separately preparing to release its own discussion draft.
Despite previously aiming to pass both stablecoin and market structure legislation before Congress leaves for its August recess, the White House and GOP leadership are now aiming to wrap up the second key crypto bill by the end of September.
Financial regulators take on new responsibilities
Under the GENIUS Act, several financial regulators are poised to take on new responsibilities regulating stablecoins.
The Office of the Comptroller of the Currency (OCC) is set to regulate stand-alone stablecoin issuers, while it and the Federal Reserve, Federal Deposit Insurance Corporation and National Credit Union Administration will regulate institutions they already oversee that issue stablecoins.
Stablecoin issuers can seemingly expedite the approval process if they can become chartered banks with the OCC, which has already prompted several stablecoin issuers, including Circle and Ripple, to apply for bank licenses.
Banking industry pushes back on crypto charters
The banking industry isn’t entirely content with the direction in which things are headed and is making its concerns known, particularly on the push by some stablecoin issuers to seek bank charters.
In a letter to the OCC on Thursday, several major banking associations questioned whether the stablecoins issuers would be performing the activities of national trust banks and called for the agency to hold off on taking up their applications for now.
“Given these substantial concerns, and the policy, legal and commercial implications that chartering the applicants would have for the banking system, the associations urge the OCC to postpone consideration of the applications,” the banking groups wrote.
Traditional players weigh stablecoin adoption
Even as some voice concerns, many traditional players in the financial services space are considering or already moving into stablecoins.
Bank of America CEO Brian Moynihan said last week that his bank is working to launch a stablecoin, while Citigroup CEO Jane Fraser said her bank was considering such a move, Reuters reported.
JPMorgan Chase announced last month it was launching a stablecoin-like deposit token called JPMD, and CEO Jamie Dimon said last week that his company would be involved in stablecoins as well, according to CNBC.
Katz said he expects traditional players to “not let stand-alone stablecoin issuers just grab that potential market.”
“Some of them are probably not even totally convinced that this market is going to be nearly as big as what is being projected, but they can’t take any chances,” he said. “They have to plan defensively and make sure they’re not left out in the cold if stablecoins really take off in a big way in the coming years.”
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