Trump signs GENIUS Act into Law, establishing first U.S. Federal stablecoin framework

Jul 18, 2025

President Trump signed the GENIUS Act into law on July 18, 2025, establishing the first federal regulatory framework for cryptocurrency in U.S. history. The legislation creates a two-tier system with state and federal licensing paths, requires 100% reserve backing for payment stablecoins, and designates the Office of the Comptroller of the Currency as primary regulator for non-bank issuers. State licensing is capped at issuers with no more than $10 billion in outstanding stablecoins, effectively pushing dominant players like USDT (58% market share) and USDC into federal oversight. The framework arrives as the stablecoin market reaches approximately $316 billion, with forecasts projecting growth to $1.9-2 trillion by 2028-2030. FSOC describes the system as designed to onshore innovation, protect holders during insolvency, and support the dollar's international role, though Standard Chartered estimates stablecoins could pull $500 billion in deposits from traditional banks by 2028.

Federal framework establishes two-tier regulatory structure with state and federal paths

▪Treasury's first proposed GENIUS Act rule was published on April 1 as a notice of proposed rulemaking.

Treasury's 'substantially similar' standard constrains state regulatory autonomy

▪Under the GENIUS Act, a state may allow additional reserve assets only if the OCC has already approved them as similarly liquid federal government-issued assets.

$10 billion threshold creates structural pressure toward market concentration

▪As of October 2025, more than 97% of the stablecoin supply had converged on USDT and USDC.
▪Retail-sized volume for USDC, USDT, and PYUSD grew from $500 million to $69.8 billion between 2019 and 2025.
▪The current stablecoin market holds approximately $316 billion, with USDT accounting for about 58% of the supply.
▪State transition rules under the GENIUS Act cannot impede a move to federal oversight once an issuer crosses the $10 billion threshold.
▪The GENIUS Act caps the state licensing option at issuers with no more than $10 billion in consolidated outstanding payment stablecoins.

Stablecoin growth projections and implications for dollar infrastructure

▪Standard Chartered projected the stablecoin market could reach $2 trillion by the end of 2028.
▪Citi's updated 2026 forecast puts its base-case estimate for the 2030 stablecoin market at $1.9 trillion.
▪Standard Chartered estimated stablecoins could pull roughly $500 billion in deposits out of US banks by the end of 2028.

Perspective of Traditional banking sector

▪Standard Chartered estimated stablecoins could pull roughly $500 billion in deposits out of US banks by the end of 2028.

Perspective of State regulators

▪State regulators under the GENIUS Act lose jurisdiction over issuers that fail certification or exceed the $10 billion threshold.

Perspective of Large stablecoin issuers (USDT and USDC operators)

▪The GENIUS Act's $10 billion state licensing cap effectively requires dominant issuers like USDT and USDC operators to enter federal oversight.
▪Market concentration favoring USDT and USDC reached over 97% of stablecoin supply as of October 2025, preceding GENIUS Act implementation.