Trump Signs the "Genius Act": The US Enters a New Era of Stablecoin Regulation, Global Financial Landscape Faces Restructuring

On July 18, 2025, U.S. President Trump officially signed the "Guidance and Establishment of the U.S. Stablecoin National Innovation Act" (abbreviated as GENIUS Act) at the White House, marking the first establishment of a federal-level stablecoin regulatory framework in the United States. During the signing ceremony, Trump declared, "This is one of the greatest transformations in financial technology since the birth of the internet," and jokingly stated that the abbreviation GENIUS "is named after me" — this remark quickly sparked heated discussions on social media, with netizens humorously calling it the "Great Satoshi Act."

##Core of the Bill: 100% Reserve Requirement and Transparent Regulation

Stablecoins, as cryptocurrencies that are pegged to the value of the US dollar, have long lacked unified regulation. This "Genius Act" directly addresses the industry's pain points and establishes three core rules:

• 100% asset-backed: For every 1 dollar stablecoin issued, an equivalent amount of dollars or short-term US Treasury bonds must be held as reserves.
• Monthly Disclosure Mechanism: Issuers are required to publicly disclose the composition of reserve assets every month, subject to public supervision.
• Bank access open: Allow banks, credit cooperatives, and other traditional financial institutions to directly issue stablecoins.

On the day the bill was signed, the world's largest stablecoin USDT surpassed a market value of 160 billion USD, holding US Treasury bonds worth 127 billion USD, making it comparable to the 18th largest holder of US debt globally, alongside sovereign nations such as Germany and South Korea.

This regulatory framework brings the current $260 billion stablecoin market under federal jurisdiction, clearing the way for explosive growth in the future. According to Standard Chartered, the market size could exceed $2 trillion by 2028.

##Political Economy: Dual Solutions to the Debt Crisis and Dollar Hegemony

Trump stated candidly at the signing ceremony: "Stablecoins will ensure the status of the dollar as the world's reserve currency — the consequences of losing this status are comparable to losing a world war." This statement reveals the deeper strategy behind the legislation:

• Mitigating U.S. Debt Pressure: Mandatory stablecoin pegging to U.S. debt creates a "new necessity." Currently, 90% of the global stablecoin market share is held by USDT and USDC, and their continued accumulation of U.S. debt can alleviate government financing pressure.
• Penetrating Emerging Markets: In regions such as Southeast Asia and Africa, stablecoins have become a cross-border payment tool for small and medium-sized enterprises, replacing the traditional SWIFT system. This "informal dollarization" accelerates the penetration of the dollar in financially weak areas.
• Countering the Impact of Digital Currencies: Former Federal Reserve Governor Raskin pointed out, "When central banks around the world advance digital currencies, the U.S. chooses to weaponize privately issued digital dollars, which is a technological upgrade of dollar hegemony."

Dramatically, Trump admitted during his speech that another motivation for supporting cryptocurrency was, "I also do it for the votes," which sparked laughter throughout the audience. Data supports this statement — during the 2024 election, political donations from the crypto industry exceeded $245 million, primarily directed towards candidates supporting the legislation.

##Controversy Vortex: Conflict of Interest and the "Gray Rhino" of Global Finance

Despite the bipartisan majority support for the bill (Senate 68:30, House 308:122), criticism has not subsided:

• Regulatory loopholes: Tech giants are not prohibited from issuing stablecoins, and the business activities of officials' relatives are not covered. Democratic Congresswoman Waters criticized: "The World Liberty Financial company, controlled by the Trump family, has just issued a USD1 stablecoin, and the bill paves the way for its wealth accumulation."
• Doubts about financial stability: Bank of England Governor Andrew Bailey warned that if large stablecoins decouple, it could trigger a wave of US Treasury selling, undermining the cornerstone of national credit.
• Cross-border regulatory dilemmas: The Bank for International Settlements points out three major flaws of stablecoins: lack of central bank backing, weak anti-money laundering measures, and lack of credit function. In developing countries with high inflation, this could trigger capital flight and local currency collapse.

The EU Central Bank report warns further: if the US dollar stablecoin monopolizes the market, the Eurozone's payment sovereignty will face the risk of being undermined. The Italian Minister of Finance has urgently discussed defense strategies.

##Future Outlook

The battlefield of stablecoins has transcended technological competition and become a new tool for the financial sovereignty of great powers. When USDT holds U.S. Treasury bonds equivalent to South Korean sovereign levels, and Trump raises the "GENIUS" bill at the signing ceremony, declaring "America wants to become the capital of the crypto world," a watershed moment in financial history has already emerged.

In the next ten years, we will witness a contest between two models: the United States expanding the "digital dollar" through private capital, while Hong Kong experiments with a multi-currency stablecoin to explore a new path for the internationalization of the Renminbi. As analysts in the City of London have said, "Whoever sets the stablecoin rules will control the arteries of the next generation of the global payment network."