Trump signs the GENIUS Act, ushering in a new era of stablecoin regulation in the United States.

On July 18, in the Oval Office of the White House, President Trump signed the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) in the presence of industry leaders. This is the first comprehensive regulatory framework for stablecoins at the federal level in U.S. history.

At the signing ceremony, Trump called this legislation "the greatest revolution in the fintech sector since the birth of the Internet." The bill was passed with an overwhelming majority in the House of Representatives with 308 votes to 122, and in the Senate with 68 votes to 30, ending the long-standing lack of clear regulatory guidance for stablecoins in the United States.

##Core of the Bill, Reshaping Financial Infrastructure Rules

The GENIUS Act establishes clear rules for the $260 billion stablecoin market, with its core pillar being the 100% reserve requirement.

The bill clearly states that all stablecoin issuers must hold sufficient U.S. dollars or short-term U.S. Treasury bonds as reserves. This requirement directly addresses the past issues in the industry of some issuers having partial reserves or even no reserves.

Compliance costs have become a new threshold for the industry. Issuers must conduct monthly public disclosures of their reserve asset composition and undergo independent audits. For stablecoins with a market capitalization exceeding $50 billion, stricter annual audits must also be performed. These regulations have significantly increased the operational costs in the industry.

Dual protection of security and compliance. The legislation incorporates anti-money laundering (AML) and Bank Secrecy Act (BSA) requirements, allowing issuers to freeze or destroy assets under court orders to prevent illegal activities. These measures are intended to address the long-standing issue of stablecoin abuse in illegal financial activities.

##Traditional banks entering the market, financial giants' stablecoin layout

The clarification of regulations has stimulated the enthusiasm of traditional financial institutions to participate. Major banks in the United States are accelerating their stablecoin plans:

Bank of America (BAC) is developing its own stablecoin, and CEO Brian Moynihan has specifically identified "small cross-border payments" as the first practical application scenario.

Citi has adopted a multi-line layout strategy while exploring stablecoin issuance, custody services, and "Citi Token Services". Its tokenization services have been launched in four markets, handling amounts reaching billions of dollars.

JPMorgan Chase (JPM) has taken the lead in launching the JPM Deposit Token (JPMD) for institutional clients, becoming the first major bank in the United States to introduce a tokenized deposit product.

Bank of New York Mellon (BK), as an industry infrastructure provider, has provided custody services for major issuers such as Circle (USDC), Ripple (RLUSD), and Société Générale (USDCV).

Despite the active layout of banks, industry leaders remain cautious about the actual demand for domestic payment scenarios in the United States. Citigroup pointed out that the current exchange cost between fiat currency and stablecoin is as high as 7%, which limits the scope of application.

##Market Impact, Expansion and Restructuring of the $260 Billion Ecosystem

The signing of the GENIUS Act coincides with a historic moment for the crypto market — the total market value of cryptocurrencies has surpassed 4 trillion dollars for the first time. This milestone is attributed to the strong performance of altcoins in recent times and the breakthrough progress in U.S. crypto legislation.

The current stablecoin market shows a highly concentrated pattern. Tether (USDT) dominates the market with a market capitalization of 161 billion USD, followed closely by USDC with about 60 billion USD. Together, they account for nearly 87% of the market share.

According to the latest research report from Bank of America Merrill Lynch, the stablecoin market is expected to see moderate growth of 25 billion to 75 billion dollars over the next year. However, the real transformation will become evident in the medium term—within the next 2 to 3 years, the disruptive impact of stablecoins on traditional bank deposits and payment systems will become "clearly visible."

The bill also brings about structural changes. It prohibits the provision of yields to stablecoin holders, a regulation that forces issuers like Circle to redesign their reward programs. Analysis indicates that the bill may encourage more stablecoin issuers to apply for traditional banking licenses rather than the specialized licenses established by the bill.

##International linkage, global regulatory framework accelerates formation

The United States is not going it alone. Just as the GENIUS Act was signed, the stablecoin regulatory bill in Hong Kong has entered its final stages and is expected to take effect on August 1, establishing a regulatory model similar to that of the United States.

In Europe, the French banking giant Société Générale's SG-Forge has launched the MiCA-regulated dollar stablecoin CoinVertible (USDCV), available to institutional and individual users.

This regulatory collaboration creates a favorable environment for cross-border payments. Major jurisdictions such as the United States, Hong Kong, and the European Union are forming interconnected regulatory frameworks to reduce compliance barriers. A recent report by the Bank for International Settlements (BIS) indicated that such coordination could reduce global cross-border payment costs by more than 50%.

##The Road Ahead: Challenges and the Dawn of a $2 Trillion Market

Despite the signing of the bill, the controversy has not subsided. Consumer rights organizations emphasize that stablecoins are not covered by FDIC deposit insurance, and users still face redemption risks and potential hidden fees.

Some lawmakers question the adequacy of the bill. Senator Elizabeth Warren warned that the bill could lead to taxpayer bailouts in the event of publisher bankruptcy, while Richard Blumenthal criticized its failure to close regulatory loopholes.

Trump's personal connections to the cryptocurrency industry have also drawn attention. He holds investments related to World Liberty Financial and has a position in TRUMPmeme coin valued at approximately 3 million USD. A White House statement noted that these assets have been isolated through a family trust, but ethical controversies persist.

The industry is facing an urgent timeline. Publishers must complete compliance adjustments within 18 months after the bill takes effect, while foreign stablecoins have a three-year transition period to meet U.S. standards.

Former Treasury Secretary Scott Bessent predicts that, after regulatory clarity, the stablecoin market size could soar from the current $260 billion to $2 trillion. Christian Catalini from the MIT Cryptoeconomics Lab anticipates that banks and fintech companies will engage in fierce competition with traditional issuers.

Custody giants like Bank of New York Mellon and State Street have begun managing reserve assets for issuers like Circle and Ripple; Citigroup's token services are handling billions of dollars in transactions across four markets. Financial infrastructure is being restructured.

After the 18-month transition period ends, the $2 trillion market will no longer be out of reach. When Walmart and Amazon consider issuing their own stablecoins, and when USDT becomes an important buyer of US Treasury bonds, stablecoins will no longer be a marginal experiment but will become the cornerstone of the mainstream financial system.