While most people think of cryptocurrency as risky digital money that goes up and down like a roller coaster, President Trump just signed a law that could turn one type of crypto into America’s secret weapon for keeping the dollar strong around the world.
On July 18, 2025, Trump signed the GENIUS Act, creating the first federal rules for stablecoins in America. Think of stablecoins as the boring cousins of wild cryptocurrencies like Bitcoin. While Bitcoin’s price jumps around like a caffeinated kangaroo, stablecoins stay steady by being backed by real dollars and government bonds. These stablecoins must comply with regulatory compliance standards similar to traditional financial institutions.
Unlike Bitcoin’s wild price swings, stablecoins maintain steady value by being backed with real dollars and government bonds.
The new law requires stablecoin companies to follow strict rules that banks already follow. They must keep real dollars and short-term Treasury bonds equal to every digital coin they create. It’s like a digital piggy bank where every digital dollar must have a real dollar sitting safely in reserve.
Here’s where Trump’s strategy gets clever. When stablecoin companies buy Treasury bonds to back their digital coins, they’re fundamentally lending money to the U.S. government. As more people around the world use these dollar-backed stablecoins for payments, the demand for actual dollars and Treasury bonds increases. This helps keep America’s borrowing costs low and strengthens the dollar’s position globally.
The law also treats stablecoin companies like banks, meaning they must follow anti-money laundering rules and can freeze suspicious transactions when law enforcement asks. This addresses concerns that crypto could help criminals while still allowing innovation. Foreign companies from approved countries can also operate in the U.S. if they register with regulators and keep their reserves in American banks. Companies violating these new rules face daily penalties of up to $100,000, or $200,000 for knowing violations.
Banking regulators like the Federal Reserve will oversee these companies, especially the biggest ones worth over $10 billion. Companies must publish monthly reports showing exactly what assets back their stablecoins, replacing the honor system with mandatory audits.
Trump’s gamble is that by creating clear, tough rules for stablecoins, America can lead the world in digital money while actually strengthening traditional finance. Instead of fighting crypto innovation, the law harnesses it to boost demand for dollars and Treasury bonds.
If successful, this could help cement the dollar’s role as the world’s favorite currency for decades to come, making America’s financial influence even stronger in the digital age.
