SEC Enacts GENIUS Act for Stablecoin Regulation

TLDR

• GENIUS Act signed into law on July 18, 2025.
• Two-tier licensing system for stablecoin issuers introduced.
• Act aims to enhance U.S. dominance in global finance.

The U.S. Securities and Exchange Commission (SEC) has announced crucial regulatory changes with the signing of the GENIUS Act into law. SEC Chair Paul Atkins has emphasized the act as a vital development for market transparency and innovation in stablecoins. This legislation, signed into law by President Donald Trump on July 18, 2025, aims to strengthen U.S. dominance in global finance and cryptocurrency technology.

The GENIUS Act is lauded as the first comprehensive federal crypto-related framework formalized into U.S. law. With its passage, significant implications for the stablecoin market and broader crypto economy are anticipated.

Key Supporters and Official Endorsements

Paul Atkins, appointed by President Trump, serves as the central regulatory figure for this legislation. He has a longstanding history in market oversight roles. Atkins highlighted the GENIUS Act’s framework for enhancing transaction efficiency while maintaining safety standards.

“Over the coming months and years, I look forward to watching the market leverage the regulatory framework provided by the GENIUS Act to go to market with payment stablecoins solutions that make transactions quicker, cheaper, and safer—all while maintaining robust risk safeguards.”

Paul Atkins, SEC Chair

President Donald Trump has also expressed his approval, describing the act as a “giant step” for American finance and crypto leadership. During the signing, Trump noted the administration’s aim to solidify American dominance in these sectors.

Regulatory Framework and Requirements

The GENIUS Act introduces a two-tier licensing system for stablecoin issuers. Tier 1 applies to issuers with a market cap below $10 billion, allowing them to operate under state licenses if they meet federal standards. Tier 2 issuers, with market caps exceeding $10 billion, must secure a federal license monitored by the OCC or other relevant federal banking regulators.

• Stablecoins must be fully backed by U.S. dollars or liquid assets.
• Issuers with over $50 billion market cap must complete annual audits.

This act is designed to foster both compliance and innovation by providing clear federal standards for dollar-denominated stablecoins.

Impact on Cryptocurrencies and Market Landscape

The GENIUS Act directly affects stablecoins such as USDC, USDT, and others, imposing new compliance, audit, and reserve standards. While altcoins related to stablecoin infrastructure and some Layer 1 assets may see indirect effects, stablecoins are primarily the focus.

Other crypto assets are expected to feel the impact as the federal framework sets a new precedent. The legislation’s clarity could drive institutional inflows and influence on-chain activity within the Decentralized Finance (DeFi) sector.

Past and Comparative Events

The United States has debated stablecoin frameworks before, but the GENIUS Act is the first to enforce federal standards. Comparable legislation, such as the European Union’s Markets in Crypto-Assets (MiCA) regulation, triggered an increase in European stablecoin issuance and institutional DeFi activity. Similar effects are anticipated in the U.S. market.

This historic law marks a significant step in regulating cryptocurrency, setting clear rules for market participants and possibly shaping global discourse on crypto regulations.

Regulatory and Market Reactions

SEC Chair Paul Atkins and President Trump are key proponents of the GENIUS Act. The legislation passed the House with a vote of 308-122 and had prior Senate approval. Observers note the possible influence of Trump’s crypto ownership on his administration’s policies.

Despite the groundbreaking nature of the Act, reactions from renowned crypto figures such as Arthur Hayes, CZ, and Vitalik have not been documented in official channels.

For sought-after market insights and official commentary, stakeholders and enthusiasts are advised to refer to SEC’s latest speeches and statements.