US Passes Comprehensive Stablecoin Law, Shifts Regulatory Approach

The U.S. has established a comprehensive federal regulatory framework for stablecoins with the passage of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), signed into law by President Trump in July 2025. This landmark legislation defines stablecoins as payment assets, explicitly excluding them from classification as securities or commodities, thereby removing them from the direct oversight of the Securities and Exchange Commission (SEC).

The GENIUS Act mandates that all stablecoins must be backed on at least a one-to-one basis by high-quality liquid assets, such as U.S. dollars, bank deposits, and short-term, low-risk securities like U.S. Treasuries. Regulatory responsibility is divided based on the type of permitted payment stablecoin issuer (PPSI). Subsidiaries of insured depository institutions (IDIs) require approval from their primary federal regulator. Non-bank entities and uninsured national banks fall under the purview of the Office of the Comptroller of the Currency (OCC) as federal qualified issuers. State-qualified issuers, including non-bank entities and state-chartered depository institutions with less than $10 billion in outstanding stablecoins, must be incorporated in a U.S. state with a regulatory regime certified as substantially similar to the federal framework and are supervised by their state banking regulators.

This legislative development coincides with a broader shift in the Trump administration's approach to cryptocurrency regulation. Federal agencies, particularly the SEC and the Commodity Futures Trading Commission (CFTC), are moving towards a more predictable and business-friendly environment for digital assets. This includes a reduced emphasis on pursuing regulatory enforcement through litigation, with the SEC reportedly ceasing prosecution of some high-profile enforcement actions against crypto market participants. Companies operating in the stablecoin and broader digital asset space are advised to review their compliance programs, monitor upcoming regulations and agency guidance, and prepare for evolving requirements, especially concerning reserve management and reporting. Additional legislative acts, such as the Anti-CBDC Surveillance State Act and the CLARITY Act, are anticipated to become law in the near future.