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Stablecoins have taken center stage in the crypto community following Crypto Week, officially designated as a period for crypto discussions and passing new legislation, kicked off on 14th July 2025. During this time, stablecoins were a main point of discussion, particularly when it came to the Genius Act (Guiding and Establishing National Innovation for U.S. Stablecoins), which was approved by the House on 17th July by a 308–122 margin, and signed into law by President Donald Trump on 18th July. Under this new law, only Permitted Payment Stablecoin Issuers (PPSIs) may issue U.S. dollar‑backed stablecoins.
In this article, we explore where stablecoins stand post-Crypto Week and Genius Act, including the increased protection for consumers, and stablecoins’ growing role in real-world payments.
What is the Genius Act exactly?
The Genius Act is the latest piece of legislation related to cryptocurrencies to be signed by President Donald Trump. Before the Genius Act, stablecoins in the U.S. operated in a gray zone, as the regulatory framework was fragmented and loosely defined. Both the SEC and CFTC vied for jurisdiction, state-level licensing varied wildly, and issuers faced few standardized requirements regarding reserves and audits. As a result, institutional adoption was lagging with banks wary of unclear compliance expectations. Even though U.S.-backed stablecoins like USDC and USDT were moving billions each day, they were doing so without a solid legal foundation, which put the brakes on broader integration into the financial system.
The Genius Act fundamentally changed that. For the first time, the U.S. now has a dedicated legal framework for payment stablecoins. The Act restricts issuance to regulated entities, namely insured depository institutions, nonbank firms with a federal charter, and certain state-licensed trust companies. It mandates full 1:1 asset backing in high-quality liquid assets, such as cash or Treasuries, removes stablecoins from SEC and CFTC jurisdiction, and places supervisory authority with banking regulators like the Federal Reserve, FDIC, and OCC. In effect, the Genius Act formalizes stablecoins as a legitimate component of the U.S. payments infrastructure, on par with traditional money transmission.
Increased protection for consumers
One of the greatest benefits of the Genius Act is that it forces stablecoin issuers to play by clearer, safer rules. Before this law, users had to trust that a stablecoin was fully backed, without always knowing what those reserves actually were. Some issuers were transparent, others less so, and there were no unified standards to guarantee stability. Now, under the Genius framework, every payment stablecoin must be backed 1:1 by cash or high-quality liquid assets like short-term U.S. Treasuries. Monthly audits are mandatory and issuers have to publicly report their reserve holdings.
The Act also narrows the field of who’s allowed to issue stablecoins in the first place. Only banks, federal trust companies, and a select group of licensed entities can do it and all of them have to meet strict standards. Stablecoins are now better positioned to move into the mainstream as real-world financial tools. This new regulatory clarity for stablecoins removes a major barrier for banks, fintechs and payment providers that had been patiently observing from the sidelines. Now, everything from payroll disbursements to stablecoin payments embedded in apps and digital wallets can be explored while abiding by clear and solid compliance criteria.
The future of stablecoins for payments
With the regulatory fog lifting, at least in the U.S., the future of stablecoins is bright, now able to take on a more central role for real, utility-driven payments. Stablecoins are crypto for people wary of crypto, as they remove the volatility of sudden price shifts, but offer all the benefits of decentralized money: instant transaction settlement, 24/7 operation, cross-border payments processed in minutes, reduced transaction fees, and zero risk of chargeback. European banks such as Banco Santander announced plans back in May to launch a euro-backed stablecoin for its retail customers following the introduction in December 2024 of the MiCA regulation, while U.S. institutions JPMorgan, Bank of America, Citigroup and Wells Fargo have also discussed the possibility of jointly issuing a stablecoin.
Thanks to the Genius Act, payment providers, fintech platforms, and institutional players now have the legal clarity they need to integrate stablecoins confidently into their offerings in the U.S. Essentially, the groundwork is finally being laid for a new wave of products and services that bridge the gap between traditional finance and digital assets while remaining fully compliant. As adoption grows and U.S. efforts align with other global frameworks, such as MiCA, stablecoins are likely to become the default digital money for cross-border commerce and modern payment infrastructure. Crypto Week marked a turning point for digital asset management in the U.S., but the bright future of stablecoins is just getting underway.
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