A landmark shift in financial policy has taken place in the United States with President Trump’s signing of a legislative package on cryptocurrency, the central element of which is the GENIUS Act (Guidance and Implementation of National Innovations for US Stablecoins). For the first time in U.S. history, this act establishes a clear federal regulatory framework for stablecoins — cryptocurrencies whose value is firmly pegged to stable real assets. The Trump Administration presents this legislation as a historic milestone that will enable the United States to lead the global revolution in digital currencies.
Until now, despite their decade-long existence and market capitalization reaching nearly $244 billion by May 2025, stablecoins performed a narrowly specialized function as a bridge between traditional finance and the volatile world of crypto assets. Having now obtained legal status as a means of payment, this cryptocurrency is prepared to challenge traditional payment systems. As RAND Corporation researcher Jim Mignano observes, “this law effectively legitimizes a long-awaited but politically fraught phenomenon, the so-called corporate cryptocurrency”.
The key innovation of the GENIUS Act is the requirement for one-hundred-percent backing of tokens — digital records in a distributed ledger (blockchain) certifying rights to specific assets or services. Following the enactment of this law, stablecoin tokens must be fully backed by highly liquid and secure assets, specifically U.S. dollars and short-term Treasury securities.
This provision, alongside the obligation of stablecoin issuers to publish monthly reports on their reserves, is intended to eliminate major regulatory concerns. Yet the geopolitical and macroeconomic dimensions of this step are no less significant. The law’s adoption occurs against the backdrop of mounting challenges for the American economy: a national debt reaching $37 trillion and a growing budget deficit. In this context, the legalization of stablecoins is viewed as a tool to alleviate the debt crisis, since the mandatory holding of reserves in government securities is expected to substantially increase demand for them.
Despite the optimism of proponents, including Trump himself, who has thus rewarded the crypto community for contributions to his election campaign, such rapid integration of crypto assets raises serious concerns. Critics, among them Senator Elizabeth Warren, warn of risks to financial stability, as the law erases the traditional separation between banking activities and commerce.
Given the decentralized nature of cryptocurrency production, legalization opens the door to a new class of issuers: in addition to individuals, large multinational corporations may also issue tokens. Companies such as Meta (formerly Facebook), which had previously abandoned its “Libra” cryptocurrency project under regulatory pressure, are now cautiously re-entering the field. Similarly, the forthcoming “JPMD” token by JP Morgan represents a calculated attempt to integrate traditional banking infrastructure with stablecoin innovations. This marks the emergence of a paradoxical phenomenon: a technology originally designed to undermine the foundations of traditional finance now receives its strongest impetus for development from the very institutions it was intended to bypass.
The failure of the Libra project was largely due to the absence of institutional trust. The GENIUS Act, by contrast, provides precisely the legal foundation that may clear the path for such projects in the future. Nevertheless, as experts emphasize, legal compliance alone is insufficient for achieving socially beneficial outcomes. Corporate cryptocurrencies may simplify payments, but this potential will only be realized if the systems created are transparent, inclusive, and interoperable. Otherwise, there is a risk that these innovations will merely reinforce market concentration in the hands of a few technological giants.
The Trump Administration’s approach stands in marked contrast to the regulatory strategies of other global centers. While the European Union has implemented a comprehensive and unified framework for crypto-asset regulation under “MiCA”, and Russia is cautiously experimenting with cross-border settlements under special legal regimes, the U.S. is betting on liberalization under private-sector leadership. Notably, U.S. law explicitly prohibits the Federal Reserve from issuing its own digital currency, thereby cementing the private nature of digital money, whereas BRICS countries are actively developing state-backed equivalents.
In parallel with stablecoin legalization, the tokenization of real assets is also gathering momentum, with the market already reaching $25 billion. Giants such as BlackRock are actively issuing tokenized funds. Yet legal complications persist, as evidenced by SEC Commissioner Hester Peirce’s reminder that “tokenized securities remain securities”, and therefore must comply with all disclosure requirements.
Despite the adoption of a framework law, there remains a vast field of work for regulators. At the federal level, it will be necessary to harmonize consumer protection and data governance rules across different agencies. At the state level, policy remains fragmented: there are significant divergences between jurisdictions embracing crypto-experimentation, such as Wyoming, and those maintaining cautious licensing regimes, such as New York. At the international level, the challenge is to manage systemic risks and combat illicit financial activities.
In the broader context of the new U.S. crypto policy, another ambitious initiative should also be considered — the potential use of Bitcoin as a state reserve asset. This idea, outlined in the 2024 Bitcoin Bill, envisages that the U.S. Federal Reserve would be required to acquire up to 200,000 bitcoins annually. According to its authors, such a measure would not only officially recognize Bitcoin as a significant financial instrument alongside gold but also serve the goal of strengthening the U.S. monetary system.
Alongside these legislative shifts, the Trump Administration is also using executive authority to accelerate cryptocurrency integration, this time at the level of mass retail investors. A presidential executive order grants more than 90 million Americans participating in retirement plans access to alternative assets, including private equity, real estate, and, most notably, digital assets.
The White House regards this step as a means of democratizing investment and potentially increasing the returns on workers’ retirement savings, by providing them the same opportunities that were previously available only to wealthy investors. This decision is a direct continuation of Trump’s campaign promise to make the United States the cryptocurrency capital of the world, and it represents another step towards legitimizing cryptocurrencies as a fully-fledged investment class.
At the same time, the legalization of cryptocurrencies exposes a profound ideological contradiction between the letter of the new law and the very “spirit of cryptocurrency”. Cryptocurrencies were originally conceived as a decentralized and anonymous alternative to state financial systems. The imposition of strict rules, though necessary to restore investor confidence, constitutes a compromise that reshapes the crypto market and threatens its fundamental principles. Here, the concept of the “digital footprint” plays a central role. Unlike cash, every stablecoin transaction is permanently recorded in a public distributed ledger. This mechanism creates an indelible history of all operations, potentially open to analysis, thereby posing the risk of total financial transparency — contrary to the original principles of privacy.
Finally, U.S. regulatory efforts extend beyond stablecoins, with the next step being the elimination of legal uncertainty in the sector. The key problem lies in the absence of clear criteria for determining whether a digital asset should be classified as a security, under SEC oversight, or as a commodity, under the jurisdiction of the CFTC. This ambiguity generates ongoing conflicts. It is precisely this issue that the newly introduced Digital Asset Market Transparency Act “CLARITY” is intended to address by establishing clear rules of the game and delineating regulatory authority.
Simultaneously, a more nuanced approach is being developed toward decentralized finance (DeFi). This strategy envisages a distinction between financial intermediaries, such as centralized exchanges, which will be subject to strict oversight, and decentralized protocols themselves. The latter, being by nature software code rather than legal entities, may fall under a different regulatory model, focused not on financial licensing but on security audits and technical standards of transparency.
Overall, the American approach is designed to stimulate technological innovation at the core of the industry, while maintaining investor protection on the platforms that serve as their primary gateways into the world of digital assets.
* The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.
